Monzo, a UK-based neobank, reportedly considering acquiring Lunar.
In the rapidly evolving world of fintech, Monzo, a leading U.K.-based neobank, is making moves to expand its presence in Europe. Reports of a potential merger with Danish peer Lunar Eclipse have emerged, although the details are still under wraps.
Monzo, which launched in 2015, has amassed a substantial customer base of 7.4 million, making it the seventh-largest bank in the U.K. by client numbers. The company's net operating income for the year ending February 2022 reached £214.5 million ($266.1 million), almost doubling year-over-year.
Lunar Eclipse, with over 650,000 users across Denmark, Sweden, and Norway, is another player in the European fintech scene. The company was valued at $2.2 billion last year.
However, the search results do not contain information about who considered Lunar Eclipse in Europe as a potential merger partner. Deliberations between Monzo and Lunar Eclipse are ongoing, but there is no certainty a deal will materialize.
The talks come at a time when rising interest rates and a drop in venture funding have created a challenging environment for fintechs and neobanks, leading to speculation about consolidation.
Meanwhile, other fintechs are also feeling the pinch. The LGBTQ-focused fintech Daylight has shuttered this year, while Remitly's Passbook, a money transfer fintech, has also closed its operations this year.
Interestingly, Greenwood, a neobank targeting Black and Brown communities, acquired fellow mission-driven fintech Kinly in May. Starling Bank, another U.K. neobank, hit profitability for the first time in 2021.
Monzo is not limiting its potential acquisition targets to Lunar Eclipse. The company is also exploring other opportunities for its European expansion plans. As the landscape of fintech continues to evolve, it will be exciting to see how these developments unfold.
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