N26 said the adoption of digital banking is accelerating as people adjust to Covid-19 restrictions, and fresh funding will help it launch more features.
Today (5 May), Berlin-based fintech start-up N26 announced that it has raised a further $100m in Series D funding, bringing the total raised in the latest funding round to $570m.
To date, the mobile banking business has raised a total of $770m, with a valuation of $3.5bn. N26 said that the funding extension will help the company to accelerate product development and strengthen its footprint in its core markets, where demand for mobile banking has increased in recent months.
The investment was backed by N26’s existing investors, Tencent and Peter Thiel’s Valar Ventures. In an interview with CNBC, N26 CEO Valentin Stalf said that the company was not running low on cash, but had plans to raise more capital prior to the Covid-19 crisis.
The impact of Covid-19
In a statement, Stalf added: “The adoption of digital banking is accelerating as the world adjusts to a new normal. As one of the world’s leading challenger banks, N26 is front and centre in this shift, driving global innovation from our base in Europe.
“With banking from home now more important than ever, we want to make sure that everyone can open a bank account in minutes to explore the freedom and safety of mobile banking.”
The company emphasised that there have been changes in consumer spending, banking habits and attitudes towards saving as a result of restrictions aimed at slowing the spread of Covid-19.
N26 co-founder Maximilian Tayenthal said: “The last month has already seen many people embrace banking from home, move away from cash and towards contactless payments and e-commerce. We’ve seen an unprecedented growth in online spending amongst customers above the age of 65 – an important sign that digital banking is become increasingly relevant for everyone.
“Our product teams have responded to this by accelerating new features to market, and will continue to build still more innovative products to help people bank seamlessly and safely on their mobile phones, no matter where they are.”
In the coming months, the start-up plans to continue to invest in growing its presence across its 24 European markets and the US, where it launched last year. N26 also said that it is laying the groundwork for its next market entry, and is in the process of applying for a local fintech licence in Brazil.
James Fitzgerald, partner at Valar Ventures, added: “This funding extension will help an already well-funded and successful business take the lead at a time when people are embracing digital banking more than ever.”
N26’s payment card that accompanies its mobile banking app. Image: JulianJD/Depositphotos