Monzo considering deal for Nordic rival Lunar Group - report

Monzo Bank is reportedly exploring a potential combination with Nordic peer Lunar Group as it looks for ways to expand in Europe.

Bloomberg cited people familiar with the matter as saying that Monzo has been holding preliminary discussions with the Danish company about the structure of a possible deal.

Lunar last raised funds in 2022 at a valuation of about $2.2bn, according to data provider PitchBook. Its investors include Kinnevik AB, Tencent Holdings, Greyhound Capital and Socii Capital. Many fintech companies have seen their valuations fall dramatically since that time amid rising interest rates and declining risk appetite, Sky said.

A 2021 fundraising for Monzo valued the firm at $4.5bn. It brought in money from new investors like Abu Dhabi Growth Fund, Coatue and Tencent as well as existing shareholders including Accel and General Catalyst.

It was understood that the London-based mobile bank has also studied other potential targets that would help it expand in Europe. Deliberations are ongoing, and there’s no certainty it will proceed with a deal, sources said.