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N26 adds $100 million, extending last round to $570 million

  • N26 has raised more money from existing investors.
  • The challenger bank plans to use it for product development and to strengthen its presence in its core markets.
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N26 adds $100 million, extending last round to $570 million

Entrepreneurs are fond of saying that you should raise money when you don’t need it.

Challenger bank N26 has raised $100 million, bringing its current round of funding to $570 million. With a current valuation of $3.5 billion, N26 is one of the most valuable fintechs globally.

What’s going on: This new $100 million extends N26’s Series D round of financing, announced in 2019.

  • The new money came from all of the company’s major investors, including Insight Venture Partners, Battery Ventures, and Peter Thiel’s Valar Ventures.
  • N26 has raised a total of $800 million to date.
  • This latest funding comes soon after European competitor Revolut launched in the U.S. and raised $500 million.

“The adoption of digital banking is accelerating as the world adjusts to a new normal,” said Valentin Stalf, co-founder and CEO of N26.  “As one of the world’s leading challenger banks, N26 is front and center in this shift. We are fully committed to spearheading digital innovation globally, creating world-class mobile banking solutions for all our customers around the world.”

Progress: The COVID-19 crisis has upped the demand for digital solutions, as consumers shelter in place, unable to enter bank branches.

  • N26 has 5 million users globally, according to the company.
  • In the U.S., where the company publicly launched in August of 2019, N26 has 250,000 users.
  • See Tearsheet’s in-depth look at challenger bank growth numbers (exclusive to Outlier Members)
  • A few product features that are resonating with the US market include an integration with Apple Pay, the ability for customers to get their paychecks up to 2 days early with direct deposit, an ATM locator maps found directly in the app that shows where to withdraw money without fees, and Spaces sub-accounts that help customers save for their goals.
  • Customers also receive cashback offers and exclusive discounts with music, fitness, meditation and lifestyle brands as part of the N26 perks program.

“In the last month, we’ve seen many people moving away from cash towards contactless payments and e-commerce,” aid Nicolas Kopp, N26’s U.S. CEO.

“We are also encouraged to see that many of our U.S. users are putting their salaries into their N26 accounts, signaling that N26 is serving as a primary banking solution for them.”

Use of proceeds: The new investment will be used to accelerate N26’s product development and strengthen its footprint in its core markets.

  • This message of re-entrenchment in its core markets is a different tune from previous fundraising announcements, which touted global expansion.
  • Nevertheless, N26 said that it will continue to invest in growing its presence across Europe and the U.S. in the coming months.

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