Digital banking company N26 is on track to process around $90bn in transaction volume this year, having amassed 7m customers in 25 markets.
German digital bank N26 is now valued at around $9bn having secured more than $900m in its latest funding round.
To date, N26 has raised close to $1.8bn from high-profile investors, including Third Point Ventures, Coatue Management LLC, Dragoneer Investment Group, Insight Venture Partners, GIC, Tencent, Allianz X, Peter Thiel’s Valar Ventures, Li Ka-Shing’s Horizons Ventures, Earlybird Venture Capital, Greyhound Capital, Battery Ventures, in addition to members of the Zalando management board, and Redalpine Ventures.
The latest funding round was led by Third Point Ventures and Coatue Management. Goldman Sachs Bank Europe acted as a placement agent for the round.
“This recent financing round solidifies the fact that retail banking as we know it has changed. With our fresh capital, we are in pole position to become one of the biggest retail banks in Europe, all without a single branch,” said Valentin Stalf, CEO and co-founder of N26.
Last year, N26 raised $100m in an extension of its Series D funding round. Its founders attributed the success to people embracing online banking during the pandemic.
The fintech will use its latest funding boost to significantly expand its digital banking offering. This will involve expanding its global team further. N26 aims to bring on board 1,000 new team members in the coming years, with a particular focus on the areas of product, technology and cybersecurity.
It will also significantly expand its employee equity pool, while broadening its employee stock ownership plan participation to 100pc of employees as part of one of the largest such programmes in Europe.
According to the company’s co-founder and co-CEO, Maximilian Tayenthal,: “It is hugely important to us that we can share the success of N26 with our employees. Without them, we would not be the company we are today.”
N26 has a 1,500-strong team of 80 nationalities based across the world. It has offices in Amsterdam, Berlin, Barcelona, Belgrade, Madrid, Milan, Paris, Vienna, New York and São Paulo.
Since the neobank’s founding in 2013 and subsequent service launch in 2015, it has amassed more than 7m customers in 25 markets worldwide. It currently operates in Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and Switzerland. It also operates in the US through its New York-based subsidiary N26 Inc.
Heath Terry, partner at Third Point Ventures, commented: “N26 has established itself as a leading tech-forward global digital bank. We are excited to provide capital and strategic support to accelerate N26’s work to make digital retail banking accessible to millions.”
The digital banking start-up said it’s on course to process around $90bn in transaction volume in 2021 alone. To aid future growth, N26 has agreed with the German regulator to temporarily onboard a maximum of 50,000 to 70,000 customers per month to cope with demand. This agreement will be published in an upcoming order.
With the demand for the company’s services, it is possible that new customers in certain markets may be temporarily redirected to a waiting list. Existing customers will not be affected, or have any changes to their accounts, according to the company.
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