UK-based neobank Monzo is considering a new fundraising round that would value it at $7.5 billion after failing to secure a $10 billion sale to Brazil’s Nubank and struggling to interest private equity in purchasing a stake, the Financial Times has reported.

Citing people familiar with the matter, the paper said that conversations between the bank and private equity groups including Advent International, TPG and CVC over a minority stake in it have stalled.

Monzo was looking to sell up to 15 per cent to private equity at an £8 billion valuation after talks of a takeover by Nubank fell apart in October. The acquisition would have allowed the $55 billion Brazilian bank to enter the UK market, but it is now likely to instead focus on expansion in the US, where it is listed, the FT reported.

After failing to secure interest from either of these sources, people familiar with the matter said the bank is now preparing for a more traditional venture funding round and that this had not been the bank’s preferred choice.

A private equity deal would have resulted in a far larger injection of capital, one of the people told the FT.

The news comes as Monzo works to expand its presence in mainland Europe after pulling out of the US itself earlier in the year. Last month, it began operations in Spain, its second EU market after Ireland, as part of a “deliberate, strategic decision” to grow on the continent.

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