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Danish Rival Lunar and Monzo in Merger Talks: A Potential Gateway to European Expansion
According to reports, Danish rival Lunar, which was valued at $2.2 billion last year, and Britain’s leading digital bank Monzo are in merger negotiations.
Bloomberg reported the conversations and claimed that Monzo’s goal to grow across Europe was what led to the transaction.
According to Bloomberg, there is no assurance that a transaction would be struck and the conversations are very preliminary. Monzo is also looking into other prospective targets in Europe.
The retail and corporate banking services offered by Lunar in Denmark, Sweden, and Norway are largely comparable to those offered by Monzo in the US and the UK.
In addition to the additional €35 million raised in February, Lunar raised €70 million from existing investors including Tencent, Heartland, IDC Ventures, and Kinnevik last year. These rounds reportedly came at a $2.2 billion value.
Hollywood actor Will Ferrell, who invested in the company and appeared in one of its marketing efforts last year, is another supporter of the bank.
As previously stated by CEO Ken Villum Klausen, Lunar is eager to grow outside of the Nordic region when the time is appropriate.
He stated in March 2022, “You have larger ambitions over time than just being in the Nordics, when you feel as though you have saturated the markets in the Nordic region.”
“However, we’re not rushing to get it right away. Before we could travel outside of the Nordic region, we just want to explore all of those markets in-depth. However, that is a matter we are investigating.” he concluded.
With Lunar’s European banking license, Monzo would be able to enter new European markets quickly without having to submit a time-consuming license application.
Starling, a competitor of Monzo, spent years trying to obtain a European banking license before deciding to alter direction and concentrate on providing banking-as-a-service.
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