Skip to content

A new Fintech Unicorn in Europe: Why N26 is such a success

Milestone for the German financial startup industry: According to a report of the “Handelsblatt” (e-paper edition), N26 has concluded a financing round of allegedly 260 million euros, thereby becoming the first German fintech unicorn. According to “HB”, the investors now quantify the value of the Berlin-based smartphone bank at around € 2.3 billion. A US venture capital firm, Insight Venture Partners, has led the round of financing, including GIC Singapore, Allianz Insurance and Earlybird Venture, the German venture capital firm.

There’s a new European unicorn in town.

German fintech firm N26 said Thursday it has raised $300 million from investors in a round of funding — valuing the online lender at $2.7 billion.

That not only puts the company among the ranks of Europe’s unicorns — or private start-ups valued at more than $1 billion. It also makes it one of the most valuable unicorns in the continent.

According to data compiled by CB Insights, just six other privately held European firms can claim to top N26’s market value: Global Switch, Roivant Sciences, Auto1 Group, Ottobock, The Hut Group and BGL Group.

N26’s latest funding exercise was led by U.S. private equity firm Insight Venture Partners with additional backing from Singaporean sovereign wealth fund GIC. Its other backers include Chinese tech giant Tencent, German insurer Allianz and PayPal co-founder Peter Thiel’s venture arm Valar Ventures.

The company’s mobile bank app is currently available in 24 European countries. It recently added the U.K. to the list, and sees itself broadening its international footprint again, with a U.S. expansion due early this year.

“Insight Venture Partners has been one of the biggest venture firms globally,” N26 Chief Executive Valentin Stalf told CNBC in a phone interview. “I think it’s a great addition to our investors, and launching in the U.S. in the first half of 2019, it’s a great reconfirmation of doing that.”

The Berlin-based fintech firm offers users a mobile app and a debit card, but doesn’t have a single physical bank branch. It counts itself among a breed of digital banking challengers — Revolut, Monzo, Starling and Atom, just to name a few — that are aiming to eat away at larger lenders’ customer base.

With over 2 million users signed up to the app, N26 hopes to reach 10 million customers globally “within the next couple of years,” Stalf said. The investment announced Thursday will be used to fund the start-up’s international expansion plans.

“The next goal is taking N26 global and transforming it from being a European company into a global company,” Stalf said. “We would like the business to grow to four to six more markets other than the U.S. and Europe.”

N26’s boss said its focus beyond the U.S. and Europe would be on Latin America, and added that he “would not rule out” a launch in Asia further down the line.

The firm has now racked up a total of more than $500 million in funding since it was founded in 2013. Insight Venture Partners is known to invest in companies that eventually go public, with its investment portfolio including the likes of Delivery Hero and DocuSign.

Stalf said that, while launching an initial public offering is a “dream” for him and his fellow co-founders, the company has no immediate plans.

“Going public will be an option I think going forward but it’s also not the only option for us,” he said. “This round is great for us as entrepreneurs because we are very flexible.”

“We don’t need to raise funds,” Stalf added. “We can if the business develops well, and we will evaluate the options all the time. Going public has always been the dream for us as founders, but let’s see.”

Photo by Sara Kurfeß on Unsplash

Also published on Medium.

Published inStartups

Be First to Comment

Leave a Reply

%d bloggers like this: