The fintech player has nearly 200,000 customers in Ireland in a hotly contested market for digital banking.
German challenger bank N26 has surpassed 7m customers across Europe and the US in the highly competitive space for banking apps.
The digital bank added 2m customers in the last year as it prepares to expand its subscription services and business banking offerings.
In Ireland, it has just under 200,000 customers and it expects to reach that milestone in the first quarter of this year. Its users are predominantly aged between 20 and 34 but it has seen upticks in older age segments.
N26 is still a way off from touching its chief rival Revolut, which has 1m customers in Ireland, while a group of Irish banks is plotting a joint venture to chip away at the newcomers’ market share.
Customer acquisition and product development in the fintech space is a tough game with hefty costs. German outlet Finance FWD reported this week that N26 increased its sales from €43m to nearly €100m in 2019, but losses increased from €70m to €217m.
The heavy spending has been attributed to investments in its core European markets. The company said today (28 January) that it consolidated its losses during the pandemic period, trimming its net losses in Europe from €165m in 2019 to €110m in 2020. N26 did not disclose its non-European losses.
The company raised $100m last year in an extension of its Series D round, and says its total funding is now more than $800m.
“Now more than ever, digitalisation and innovation are fundamental to Europe’s future,” N26 chief executive Valentin Stalf said. “We will continue to bring exciting everyday banking features to millions of additional customers who still feel stuck in the offline world.”
A year ago, N26 pulled out of the UK market and it is now assessing its international prospects. It has launched in the US and the company recently secured authorisation in Brazil, where it has been plotting expansion for some time.
N26 and its rivals have benefitted from a surge in e-commerce during the pandemic while in-store sales and ATM usage have dropped. N26 said transaction volumes internationally are over €5.5bn monthly.
“As we celebrate our sixth company anniversary, it’s inspiring to see that millions of people, including almost 200,000 Irish customers, trust in N26 to put their financial interests first,” Adrienne Gormley, who recently joined the company as chief operating officer, said.
“As a fully licensed digital bank, we have built a banking experience for the times we live in, not for a specific generation, especially in the confining and uncertain times we live in today.”
The company also appointed a new chief financial officer this month, Jan Kemper. The move has fuelled speculation that the company, with a private valuation of $3.5bn, is preparing for an IPO.
Kemper was previously CFO of publicly listed online retailer Zalando, leading its float on the Frankfurt Stock Exchange, as well as German media giant ProsiebenSat.1 Media.