Nubank, Monzo and the Digital Bank Valuation Gap
Hey Digital Banking Fanatic!
One of the biggest FinTech stories from the weekend was the news that Nubank is in talks to buy Monzo for £8–10 billion.
But the valuation is what really caught my attention.
Monzo generated £1.7 billion in revenue last year. At a £10 billion price tag, that would value the bank at roughly 6x revenue.
Now compare that with Revolut.
Revolut was valued at around £87 billion in July on £4.5 billion of annual revenue, roughly 19x revenue.
Apply that same multiple to Monzo and you arrive at a valuation of around £33 billion.
Of course, it’s not an apples-to-apples comparison. Revolut is considerably more profitable, much more international, and operates across a broader range of financial services.
But £10 billion versus £33 billion is still quite a gap.
So perhaps the most interesting question isn’t only whether Nubank will buy Monzo.
It’s why the market currently values two of Europe’s most successful digital banks so differently.
That’s one of the stories I’m watching closely today. Make sure you read the full newsletter and scroll down, there’s plenty more happening across digital banking. 👇
See you tomorrow!
Cheers,
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