Monzo Bank Ltd, the UK mobile bank, is exploring a potential combination with Nordic peer Lunar Group as it looks for ways to expand in Europe, according to Bloomberg. London-based Monzo has been holding preliminary discussions with the Danish company about the structure of a possible deal.
Lunar, a digital bank with over 650,000 users across Denmark, Sweden and Norway, last raised €35 million in February to invest in and develop the business and expedite its path to profitability.
Lunar’s previous raise of €28 million in August 2022 came alongside a +500% increase in income during H1 2022.
The bank’s plans to acquire Norwegian Bank, Instabank, failed in September last year, as August funding round proved insufficient to cover “capital needed to meet the capital requirements and obtain the approved from the Norwegian FSA.” Lunar had offered €132 million in March 2022 to purchase Instabank, in efforts to increase its footprint in Norway and open the door to the Finnish market.
According to Bloomberg, Monzo has been actively exploring other acquisition targets alongside Lunar to help it expand in Europe.
What experts are saying – Lunas Beliunas: „Monzo is strong in the UK only while Lunar is mainly a Danish neobank. Also, given Lunar operates in non-Euro countries, it’s hard to justify this as the European expansion strategy (at least target EUR countries). Looking at the big picture, it’s yet another signal of growing M&A activity in the neobanking sector, as firms find it harder to raise fresh capital due to a combination of rate hikes, investor caution, and unclear macroeconomic situation„.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
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