Monzo Weighs Private Equity Options After Nubank Deal Collapses

Monzo is exploring options for raising private equity funding after talks over a deal with Nubank ended without an agreement, according to a Financial Times report. The UK digital bank has been weighing how to fund its next stage of growth.

Both companies operate in the digital banking space, with Monzo among the most prominent app-based lenders in Britain and Nubank a major player in Latin America. Monzo has built a large customer base in the UK retail market, while Nubank has expanded across several countries in the region. A combination would have brought together two of the sector's better-known challengers to traditional banks.

Private equity firms have shown growing interest in financial technology businesses as valuations have come under pressure and some venture-backed companies look for longer-term capital. For a lender such as Monzo, private funding could offer room to expand without the scrutiny that comes with a public listing. Such backing can also come with expectations around governance and eventual exit routes, a consideration for founders and existing investors.

Details of the discussions were not disclosed, and neither company has outlined what a transaction might have involved. It remains unclear whether Monzo will pursue a private equity round, other private financing, or a different route to raise capital.