Series D Extension

Just 6 months ago, N26 raised $300m from its Series D. They have now extended this funding round and raised another $170m from their existing investors. This raises their valuation from $2.7bn to $3.5bn in just half a year. In an interview with the Financial Times, co-founder Maximilian Tayenthal said that the new funds would be used to further drive its marketing campaign in the US. Adding that they will also leverage the funds to speed up their European expansion plans, amongst “a few other things”.

Market Validation

Tayenthal believes that the rise in valuation is based upon the developments in the UK and US markets. “At the last fundraising we had just launched in the UK, it wasn’t entirely clear whether the UK would be a success … The figures we see right now in the UK are very promising. The second thing is we are much further right now with the US,”. Compared to January when they were “working out how to launch.”. N26 has recently launched in the US and they have a waiting list of around 100,000 customers.

Expansion Over Profits

“In all honesty, profitability is not one of our core metrics.” 

N26 explained about how profits currently aren’t one of their main focuses and that even “in the years to come we won’t see profitability.”. However this doesn’t come as much of a surprise. It is quite common for FinTech startups to prioritise market share over profits – they’re in it for the long run. N26’s investors – Tencent, Insight Partners, GIC, Allianz X and others – share their same long-term vision about becoming a global financial services company. Furthermore, they said their investors “have very deep pockets and are willing to support the company over many years to come” despite their negligence to profits.

Will N26 Lead the Way?

N26 has raised $680 million in total, the most out of their competitors. They claim that they’re now the highest valued German startup and one of the highest valued FinTech startups in the world. N26 has around 3.5m customers – 1.5m behind competitor Revolut. However, now N26 is fresh into the US market and has millions of dollars to invest. The question is – will their customer base take off and pass Revolut?

We did an analysis of Europe’s Top 5 Challenger Banks just over a month ago. Since then, millions have been invested, expansion plans have been followed through with, scandals have occurred and new offerings have been integrated. The rate of change for these FinTech challenger banks is astonashing. Who knows what the situation will be like in a few months time… We’ll keep you posted.