The Berlin smartphone bank collects 780 million euros and increases its valuation to 7.8 billion euros.
(Photo: Funke Photo Services)
Frankfurt The Berlin smartphone bank N26 receives around 780 million euros from investors in a new round of financing, the valuation rises to around 7.8 billion euros (nine billion dollars), as N26 announced on Monday afternoon. According to N26, it is the largest financing round for a digital bank in Europe.
This makes the company the most valuable financial start-up (Fintech) in Germany. In first place of the highest rated start-ups in this country is the Munich tech company Celonis, which is currently valued at 9.1 billion euros.
With a view to the banking world, N26 overtakes Commerzbank, the third largest German commercial bank after Deutsche Bank and DZ Bank Group. According to the data service provider Bloomberg, the market capitalization of the listed Commerzbank is 7.7 billion euros.
N26 co-boss Valentin Stalf wants to achieve a substantial market share: The financing round puts the company “in an excellent position to become one of the largest retail banks in Europe in the next few years – completely digital and without branches”. N26 published the number of seven million customers in early 2021.
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There has been speculation for a long time about an upcoming financing round at N26. There was even a valuation of more than nine billion euros in the room. The capital round is now being led by US investors Third Point Ventures, Coatue and Dragoneer. Investors who already hold shares have also made funds available again.
Maximum of 70,000 new customers per month
The lower than expected rating is also due to the fact that N26 is again in trouble with the German financial regulator Bafin. As the Neobank announced, the Bafin has imposed growth restrictions on it: It is therefore allowed to grow by a maximum of 50,000 to 70,000 customers per month in Europe over the next few months. That is well below the previous level.
The conflict with the supervisory authority primarily concerns deficiencies in money laundering prevention. The Bafin issued a fine of 4.25 million euros against the smartphone bank for failing to submit money laundering reports. According to the company, N26 paid in mid-July – but the matter did not become public until the end of September.
The Handelsblatt had already reported, citing people familiar with the subject, that the financial regulator recently issued growth restrictions against N26. The Bafin sees further deficiencies, among other things, in compliance, IT and the fight against money laundering.
Last year, N26 was still in the red. At a Handelsblatt conference in September, co-founder Stalf said the goal was to “continue to move towards the overall profitability of the company” in 2021 and 2022, he explained. “A profit could be within reach by the end of this year.” An IPO in the next few years is also considered likely.
More: Deficiencies in money laundering prevention – Bafin fines hit Smartphonebank N26 before the financing round.