The Brazilian fintech group Nubank has withdrawn from talks to acquire the British digital bank Monzo, ending discussions that could have valued Monzo at between £8 billion and £10 billion. Nubank's parent company, Nu Holdings, revealed the decision in a regulatory filing, stating that although it holds Monzo in high regard, it is not pursuing a transaction.

The potential acquisition had raised concerns among Nubank's investors, leading to a roughly 10 percent decline in Nu Holdings' share price on Monday following reports of the negotiations. The London-based challenger bank remains privately held and was last valued at approximately £4.5 billion through an employee share sale two years ago.

Monzo, founded 11 years ago, is among several digital-only banks in the UK aiming to disrupt traditional high street lenders such as Lloyds Banking Group and NatWest. The bank serves over 15 million retail customers and around one million business clients. In the past year, Monzo’s pre-tax profits rose 44 percent to £87.3 million, alongside a 39 percent increase in revenues to £1.7 billion.

Despite its growth, Monzo has faced challenges, including the withdrawal from the US market earlier this year after an unsuccessful expansion attempt. The bank continues to develop its presence in Ireland and has started operations in Spain.

The failed Nubank deal would have represented a significant milestone, marking a major cross-border acquisition in the fintech sector. It also would have been notable for involving one of the UK's prominent fintech firms being acquired by a foreign company.

Monzo is reportedly exploring alternative strategies to support its growth, including the possibility of selling a minority stake to private equity investors. Sources indicate that Advent International, a Boston-based buyout firm, has engaged in talks regarding a potential investment. Additionally, Monzo is considering another funding round involving venture capital firms to raise capital.

By comparison, fellow London-based fintech Revolut, also established around the same time as Monzo, has expanded more rapidly and now serves over 80 million customers worldwide, with a valuation near $115 billion.

The outcome of ongoing discussions will shape Monzo's trajectory as it looks to strengthen its position in a highly competitive and evolving digital banking landscape.