Monzo is in early-stage talks with Brazil's Nubank over a deal that could value the London digital bank at £8bn to £10bn, up to 2.2 times the £4.5bn price set in its October 2024 employee share sale. The board is weighing a sale against a fresh funding round at more than £8bn.
Monzo has spent the past two years being lined up as one of London's most likely large tech listings. Talks with Nubank now put a trade sale on the table alongside the float.
According to reports first carried by Sky News and followed by City AM and Reuters, the two companies are in early discussions about a combination. Any deal would value Monzo at £8bn to £10bn, or roughly $10.6bn to $13.25bn.
Two routes on the table
A sale to Nubank is one of two options the Monzo board is exploring. The other is a new primary round expected to value the bank at more than £8bn, with the proceeds earmarked for expansion into mainland Europe. Spain and Ireland are reported to be the priority markets after Monzo dropped its US plans.
Morgan Stanley and Qatalyst are reported to be involved in the process. Neither company has confirmed the talks, and no terms have been agreed.
The cap-table maths
Monzo's last price was set in October 2024, when an employee secondary sale valued the bank at £4.5bn. Singapore's sovereign wealth fund GIC and StepStone Group were among the buyers.
At the top of the reported range, a Nubank deal would give those secondary buyers a paper return of about 2.2 times in two years. It would also offer liquidity to the long list of venture investors and crowdfunding shareholders who have backed Monzo since it was founded in 2015.
The talks follow a year of stronger results. In the year to 31 March, Monzo made a pre-tax profit of £87.3m, up from £60.5m, while revenue rose to £1.7bn from £1.2bn. It now serves about 16 million retail and business customers in the UK.
At £10bn, Monzo would be valued at just under six times its latest annual revenue.
What Nubank gets
Nubank has been listed in New York since late 2021 and has a market capitalisation of about $65.5bn (£49.4bn), so a £10bn deal would be well within its reach. The group holds banking licences across the Americas and already runs an engineering hub in Berlin.
Buying Monzo would give Nubank a UK banking licence, a profitable domestic customer base and a ready-made platform for Europe. It would also take Nubank into direct competition with Revolut, which is lining up its own listing.
What's next
A sale would be a setback for London's listings market. Monzo had previously been linked with a potential £6bn float, and the City was widely expected to be its preferred venue. The board is also going through leadership changes: group chief executive Diana Layfield, a former Google executive, runs the bank, and chair Gary Hoffman is stepping down a year early.
Whichever route the board takes, the reported range sets a new floor for Monzo's valuation. At £8bn or more, the bank would be worth almost twice its last mark, whether through a sale, a primary round or an eventual listing.
Original source: Sky News, via City AM — https://www.cityam.com/monzo-in-talks-over-10bn-sale-to-nubank-in-blow-to-ipo-hopes/ (Sky News original: https://news.sky.com/story/digital-bank-monzo-in-talks-about-10bn-tie-up-with-brazils-nubank-13591770)
