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Fintech Startups: How to obtain your banking license and start the success

The career of the neobanks to reach the Olympus of finance is beginning to bear fruit. A few weeks ago we knew that Revolut, the British fintech but based in Lithuania, obtained its banking license after so many years struggling for it. In this way, the entity can start offering more services and the funds housed in its accounts are insured by the Guarantees and Deposits Fund. Now, one of its biggest rivals in Europe, N26, has made another announcement: a round of financing of 300 million dollars.

Gone are those days of early 2018 for N26

In just 12 months, the profile of the company has changed dramatically. In this time, according to the entity’s data, they have tripled their user base, reaching 2.3 million customers with total deposits of 1,000 million euros. Its valuation, therefore, has also changed upwards. Of the 1,000 million at the beginning of last year it has gone to a current 2,700 million.

All this with a surprise round. The Berlin bank has already had six rounds of financing since 2013; Tencent, Allianz X or Valar Ventures by Peter Thiel are just some of the funds that have gone into the capital of the company. A total of 512 million, of which 160 are part of the operation announced in March of last year.

Now, 10 months later, N26 again beat its record in financing

And really that of all fintech: it has been the highest amount achieved by a company of this type in Europe. The reason? The entrance of two weight players. The first of them for a practical matter. Insight Venture Partners, based in New York and leading the operation, draws the near future for the finetch. It is not a surprise that N26 has set its sights on the United States as the geography to be conquered in 2019. Its founder, Valentin Stalf, had already warned him for some time. The entrance of this local investor would materialize the objective of N26 in the short term taking advantage of the pull of the entity in the United Kingdom. If in the British country, explains the person in charge of N26 in Spain Francisco Sierra, they obtained 2,000 clients per day, the perspective is that in the United States the figures are greater. After reaching the north of the continent, he adds, “they have two or three other objectives to address.” It is not clear what they are, but they point to large countries in America.

On the other hand, along with Insight, the Sovereign Fund of Singapore has also participated

Known for his great activity in international real estate investments -in Spain through a series of socimis quoting in the MAB- or companies of strategic interest, the commitment to the German technology has been his last objective. The idea of entering this fund, as Sierra explains, “provides a vision of the future and stability, since it has a long-term perspective”.

But not only the road to markets in the United States set the tone. The idea, in the medium term, would be to go public in the public markets; “Although it is not a thing that is positioned as the first on the list” explains Sierra. It is not clear in which of all the markets, it depends on the success that they have in the United States, but what is certain is that before that point, the technology would have to face some important questions. On the one hand, understood as a startup rather than a bank, the N26 accounts would have to turn to profitability rather than explosive growth. Three years from now, once settled in their new markets, they may be at that point. At the moment, they explain, that although today they are not profitable, “at least the cost for the capture of each client does not cost them money”.

On the other hand, its recent security flaws

A few weeks ago, days after opening its headquarters in Barcelona, N26 was facing a serious security problem. A flaw in the platform allowed creating accounts with false identities. A situation already solved by the digital bank that, if quoted on the stock market, would have taken a large part of its public percentages.

Also published on Medium.

Published inFintech

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