Reports emerged over the weekend that UK digital bank Monzo is in early-stage takeover discussions for a sale to Brazil's Nubank. The potential deal could value Monzo at up to £10bn.
Nubank, a neobanking giant headquartered in São Paulo and listed on the New York Stock Exchange, has a market capitalisation of $59bn. It currently has limited operations in Europe and none in the UK.
Should a deal proceed, it could position Nubank to compete with Revolut on another continent. Revolut, Europe's largest fintech, is expected to be valued at $115bn (£87bn) following a secondary share sale.
Nubank's business model is largely driven by credit income, which accounted for nearly 59% of its $16.3bn revenue last year. Acquiring Monzo's £25.7bn in deposits could allow Nubank to expand into higher-return credit, adapting its model to UK regulation.
This potential acquisition aligns with Nubank's strategy of using acquisitions to expand its reach, having previously taken over Easynvest, Olivia, and Spinpayments. In contrast, Revolut has focused on deepening monetisation through obtaining banking licences across multiple countries.