Monzo is launching a bid to merge with Lunar, its Nordic rival, as it aims to accelerate its expansion across Europe.
The London fintech is holding discussions with Denmark-based Lunar over the terms of a deal, according to Bloomberg, which also states Monzo is considering other European acquisitions.
Lunar hit a US$2.2bn valuation following its last funding round last year, with over 650,000 users in Denmark, Sweden and Norway, while Monzo reached a US$4.5bn valuation in 2021.
Monzo becomes the latest London fintech to be mulling a European expansion after formally applying to the EU for a banking licence.
The bank said it would set up a base in Luxembourg with a £170mln investment and build a workforce of 300 employees in the country over five years.
“By choosing Luxembourg as its EU headquarters, there is an exciting opportunity to offer Luxembourg and the broader EU market a new global digital clearing ecosystem for financial institutions and corporate commercial clients,” the bank said.
Monzo became profitable in May following a spike in lending and customer deposits and now claims to have more than a tenth of the UK population as customers.