UK-based neobank Monzo has turned its efforts to courting private equity investors after a potential buyout by Brazil’s Nubank fell through, the Financial Times has reported.

Talks between the two digital banks collapsed after a failure to agree on a price, the paper reported, citing people familiar with the matter.

In recent weeks, Monzo has met with the European buyout group CVC and US private equity firm Advent International to discuss the sale of a significant stake in the group. People familiar with the matter told the FT this could be as large as 15 per cent of the bank.

With a Nubank takeover no longer an option, the people said, a sale to private equity was the preferred route for the bank. Monzo’s advisors will work to meet with more fund managers, the people added.

Last week, media reports suggested that the two were in discussions around a deal that would have valued the UK neobank at £10 billion. Nubank issued a statement on Wednesday saying that it is not in active conversations with Monzo regarding a takeover.

Brazil’s largest FinTech said that while it has “a great deal of respect” for Monzo, it was not planning to buy the British neobank out, adding that it regularly evaluates partnerships, investments and acquisitions as a normal part of business.

Nubank’s shares plummeted ten per cent at the start of the week in the wake of the speculation. Its public statement has reversed the majority of the damage, and the company’s stock is now trading only two per cent below last Friday.

Previous reporting suggested that Monzo could also pursue a traditional funding round backed by venture capital, but a person familiar with the board’s thinking told the FT the bank would prefer the private equity option as it would be larger and provide more cash for growth.

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