UK-headquartered digital bank Monzo is reportedly holding discussions regarding a potential merger with Nordic region firm Lunar. This, acccording to recent reports from Bloomberg.
Lunar, a virtual bank with more than 650,000 clients across Denmark, Sweden Norway, has previously secured €35 million in order to invest in and further develop the business, while focusing on achieving profitability.
Lunar’s previous fundraise of €28 million back in August last year came along with a 500% increase in total earnings during H1 2022.
The digital bank’s intention to acquire Norwegian Bank, Instabank, did not succeed in September 2022, as the August investment round was reportedly not enough to cover capital required to meet the capital requirements and “obtain the approved from the Norwegian FSA.”
Lunar had provided €132 million in March of last year in order to acquire Instabank, in an attempt to expand its presence in Norway while opening the channels to the fast-growing Finnish market.
A potential merger with Monzo could offer both banking platforms with a path to expand services further across European markets.
While reporting a loss of £116M for FY23, Fintech firm Monzo in May also registered 2.3x overall growth in revenue and also stated that it had achieved profitability for the first time in the first two months of the financial year.
As first reported by Bloomberg, Monzo is looking into other acquisition deals along with Lunar in order to help it furter expand operations across Europe.
Fintech analysts have now been expecting a series of M&A deals/activity in the neobanking space, as businesses find it more challenging to secure funding because of significant rate hikes and more reservations from investors.
