4
N26
| Power Score: 49.11 | Momentum Score: 43.53 (8) | HQ: Berlin, Germany | CEO: Valentin Stalf |
Economics
Valuation: $9 billion (+157% vs. last round, 2021)
Amt. Raised: $1.81 billion
Politics
Lobbying Spend: No
Industry Orgs: EFA
People
Headcount:
1,471 (+10% YoY)
Engineering Headcount: 316 (+7% YoY)
Big Tech Experience: 3.1%
Open Roles: 205
Innovation
R&D Spending: n/a
Patents Applied For: 0
Patents Owned: 0
Acquisitions: No
On Power
Germany-based N26 has around 7 million customers across 22 EU countries. This customer base helped N26 raise a $900 million funding round at a $9 billion valuation in October. N26 disclosed as part of that announcement that it expected to process $90 billion in transaction volume in 2021. It also said it would use the funding to hire 1,000 employees globally, though it’s unclear whether its withdrawal from the U.S.— more on that in just a moment — has affected this plan.
On Disruption
N26 has recently switched from attack mode to retreat, and this severely limits its disruptive potential. Most notably, N26
made headlines
in November when it decided to pull out of the U.S. market entirely. That was quite the about turn: In 2019, N26 sought to become the largest neobank in the U.S., and said it wanted to attract one million customers in one to two years. By November 2021, it had accrued just 500,000, and gave its U.S. customers until January 2022 to cash out their accounts.
This has become somewhat of a pattern for N26: It also
withdrew
from the U.K. in early 2020, citing Brexit. Such moves could tarnish the company’s reputation, and arguably run counter to the company’s goal of becoming “the most reliable bank that our customers can trust,” as N26's U.S. general manager Stephanie Balint
told Protocol
in October.
Tea Leaves
Even after scaling back its overseas expansion plans, N26 faces limited growth prospects in its home EU market. The German regulator BaFin imposed a limit for N26 to add only 50,000 new customers per month, citing the need for the neobank to address “risks to the institution’s operational resilience.” It also previously warned N26 multiple times about its loose money-laundering controls, and as recently as September 2021, BaFin imposed a €4.25m fine on N26 for its lack of controls. N26’s ability to navigate this regulatory turmoil will be critical to its future success.
They Said It
“We are sharpening our strategic focus on our core business in Europe for the time being.” — N26 Chief Growth Officer Alexander Weber wrote to Bloomberg in November 2021
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