As the digital banking landscape continues to evolve, British-based Monzo Bank has reportedly entered preliminary discussions about a potential acquisition of the Nordic lender, Lunar Group.
The news was first brought to light by Bloomberg News, it cites the information was relayed by an anonymous source privy to the ongoing talks. The media outlet also noted that Monzo has been looking at other potential targets, a move that indicates the digital bank’s strategic aim to expand its footprint across Europe. However, both Monzo and Lunar opted not to comment on these ongoing discussions.
The digital banking sector is experiencing a significant shift, with industry leaders predicting a wave of acquisitions and partnerships this year. This shift is driven by factors such as increased interest rates and investor caution, which have made it more challenging for FinTech firms to raise new funding.
Monzo has carved out a position as one of Britain’s most notable FinTech companies since its inception in 2015, boasting a client base of 7.4m customers. Despite its high profile and substantial customer base, the digital bank has struggled to turn an annual profit, unlike some of its competitors, like Starling.
Monzo’s financial situation, however, seems to be improving slightly. As of February 2023, the bank’s annual loss was reported to have decreased marginally.
On the other hand, Lunar Group, a digital bank headquartered in Denmark, has a growing customer base of 650,000 across Denmark, Sweden, and Norway. As per the bank’s website, Lunar recently secured funding of 35m euros ($38.56m) in February 2023.
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