The possible sale of UK neobank Monzo has revived fears that Europe is losing another homegrown success story to acquirers outside the region, as non-European investors account for an increasing share of VC-backed acquisitions.
Over the weekend, reports emerged that Monzo was in discussions with New York-listed Nu Holdings, the parent company of Brazilian neobank Nubank, about a sale that could value the startup at up to £10 billion (about $13.3 billion). Last valued at £4.5 billion in a share sale in October 2024, Monzo would see significant returns for its backers, including GV, Accel and General Catalyst, as a result of the deal.
If agreed, the deal would, however, put paid to plans for an IPO, for which Monzo reportedly hired advisers last year, and see another European startup pass into foreign hands—a trend that has been accelerating.
So far this year 173 VC-backed companies have been acquired by non-European investors for a combined €18.8 billion (about $21.4 billion). This represents 37.9% of deal count and 61.1% of value, the highest percentages this decade
Most of the year’s largest European startup takeovers were by US acquirers, including Gilead Sciences‘ $3.15 billion deal for German biotech startup Tubulis in May. In August, Mastercard completed its acquisition of London-founded and now San Francisco-based stablecoin infrastructure provider BVNK for up to $1.8 billion.
VC funding for European startups is harder to come by this year, as capital concentrates around a narrower set of companies. The IPO market is also challenging, even in the US, with several VC-backed businesses, including Finland-born smart ring maker Oura, postponing their listings due to market uncertainty.
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Acquisitions are the preferred exit route, and by choosing mostly US buyers, European startups often secure a better deal. For those acquired by non-European investors, the median deal size this year is €120.6 million, compared to €22 million for those bought by acquirers from the continent.
This is influenced by the fact that non-European buyers tend to acquire more mature companies—the pre-seed and seed stage was the only one in which their share of counts declined compared to 2025. However, with larger capital reserves and a more aggressive appetite for inorganic growth, US acquirers typically spend more on targets.
While selling abroad may yield better results for startups and their investors, it reinforces a pattern of Europe losing its potential homegrown champions.
This article originally appeared on PitchBook News
