German online bank N26 raises US$300m in funding round

Frankfurt

GERMAN online banking startup N26 said on Thursday it had raised US$300 million in a funding round that valued the business at US$2.7 billion, and would use the money to expand its global operations.

The Series D funding round, led by New York-based Insight Venture Partners and in which Singapore investment vehicle GIC participated, is one of the largest by a European fintech company in recent years.

The goal of N26 is to become the world's first global mobile bank, it said in a statement. It operates in 24 European markets.

N26, which went live in 2015, said it would use the new funds to launch its app in the United States in the first half of this year, with a long-term goal of reaching 100 million customers around the world.

"Worldwide, too many people still use bad digital banking products and pay fees that are too high," said CEO and co-founder Valentin Stalf.

N26's growth contrasts with the woes of Germany's dominant commercial lenders, with Deutsche Bank struggling to return to profitability under new management as it faces investigations into suspected money laundering.

Commerzbank, Germany's No 2 bank, remains a ward of state after taking a massive hit in the global financial crisis a decade ago.

N26's smartphone app offers a scalable, low-cost model that has already attracted backing from, among others, China's Tencent Holdings, the digital investment arm of insurer Allianz, and Silicon Valley investor Peter Thiel.

In total, N26 has attracted more than US$500 million from investors - it last raised money in March 2018. In Britain, meanwhile, app-based bank Monzo raised £85 million (S$147 million) last October in a round that valued the lender at £1 billion.

"N26 is the clear market leader in mobile banking in Europe," said Insight Principal Harley Miller. "The company is in great shape to expand this year into the US market."

N26 said its customers had deposited more than one billion euros (S$1.6 billion), and that monthly transaction volumes exceeded 1.5 billion.

The branchless bank employs 700 staff in Berlin, Barcelona and New York. REUTERS