Member Exclusive

With N26’s $900 million round of funding, could it be retreating from the US market?

  • N26 raised $900 million, valuing the firm at $9 billion.
  • In spite of the new investment, the challenger bank's commitment to the U.S. market may be flagging.
close

Email a Friend

With N26’s $900 million round of funding, could it be retreating from the US market?

German challenger bank N26 announced a $900 million Series E funding this October.  N26 coupled that announcement with another, that it was renewing its focus back to its home markets, central and eastern Europe, and would pause its activity in the US market.

N26’s latest funding values the firm at $9 billion, a significant jump from its $3.5 billion valuation at the time of Series D. N26 is now the most valuable fintech out of Germany and ranks among the top 20 globally.

Since publicly entering the US market in partnership with Axos Bank back in August 2019, N26 released a variety of services in the country, like contactless payments, easier account funding, 2-day early direct deposit, spending limits, ATM locator, discounts, and other perks. 

This initial offering powered the bank to claim it had registered some 500,000 customers in the US. However, with its latest funding, the firm has pulled back on its operations in the US. From half a million customers, it has now reverted to having a waitlist in the country. 

This forces one to wonder whether this is another case of a European fintech firm withdrawing from the US market. Earlier, British fintech Monzo withdrew its request for a banking license in the US, following discussions with regulators and the Office of the Comptroller of the Currency. Revolut’s second US CEO, Ronald Oliviera, will be leaving the firm over the next few months. While it is unclear where Oliviera is headed next or why he quit the firm, there have long been reports about Revolut’s questionable work culture, with unpaid work, unachievable targets, and high-staff turnover, according to an insider.

 

 


This content is available exclusively to Tearsheet Outlier members.

Tearsheet Outlier information and signup Missing out? Subscribe today and you’ll receive unlimited access to all Tearsheet content, original research, exclusive webinars and events, member-only newsletters from Tearsheet editors and reporters and much more. Join Outlier now — only $49/mo. Already an Outlier member? Sign in to your account

0 comments on “With N26’s $900 million round of funding, could it be retreating from the US market?”

Outlier OpinionsMakers

Member Exclusive, Payments

Payments Briefing: ‘We penetrated the blue ocean opportunity of the Spanish-speaking market’ – NovoPayment’s Anabel Perez

  • This week, we take a look at Miami-based BaaS provider, NovoPayment.
  • We also discuss Bumped, a firm that rewards customers with equity in the brands they shop from.
Ismail Umar | May 12, 2022
Member Exclusive

Lending Briefing: How fintechs are digitizing the mortgage process

  • Shifting consumer preferences are incentivizing mortgage banks to digitize other outdated, paper-based or manual parts of the business. But most of the innovation is happening outside the legacy system with fintechs taking the lead.
  • Given the current macroeconomic environment, uncertainty and dwindling margins in the mortgage sector, digital processes can help weather the storm by reducing costs.
Iulia Ciutina | May 11, 2022
Data Snacks, Member Exclusive

Data Snack: Real-time payments contribute a meager 0.9% to US transactions, FedNow expected to change that

  • The US real time payments industry is small, with just two networks, neither of which span across the country.
  • Federal Reserve’s country-wide real-time payments network initiative, FedNow, is expected to become one of the biggest payment clearance settlement systems in the world upon release.
Subboh Jaffery | May 11, 2022
Member Exclusive, New banks

Banking Briefing: Interest rates, big banks, and Revolut’s bumpy road to super-app-dom

  • The Central Bank raised its benchmark interest rate by half a percentage point. But with more fintech competition than ever, can major banks afford to respond the way they have in the past?
  • Meanwhile, Revolut’s super app strategy is hitting some bumps. What does that mean for the firm?
Rivka Abramson | May 09, 2022
Data Snacks, Member Exclusive

Data Snack: US fintech lenders down 30% on average in Q1 2022

  • Macroeconomic trends loom over the fintech sector and pressure public market stocks - most fintech lenders are down 30% or more in the first three months of 2022.
  • This could be a reaction against higher interest rates, which can grow the risk of defaults - driving investors to reevaluate fintech valuations, especially those with aggressive growth strategies.
Iulia Ciutina | May 06, 2022
More Articles