Dutch neobank Bunq announces a profit for 2023.
(Photo: mauritius images / M4OS Photos / Alamy / Alamy Stock Photos)
Frankfurt The German neobank N26 is facing a lot of competition from the neighboring country in the competition for new customers: According to its own statements, the Dutch fintech Bunq has nine million users. The deposit volume has risen to 4.5 billion euros, explained Bunq.
Similar to N26, one of the best-known financial start-ups in Germany, Bunq offers a smartphone account, i.e. a checking account that is primarily designed for the app. Measured by the number of users alone, Bunq has recently left N26 behind. The Berliners currently report more than eight million customers.
However, Bunq does not disclose the number of current accounts, which makes a direct comparison difficult. Unlike N26, Bunq offers other account types – for example savings accounts and the management of group expenses via Tricont.
For such accounts, there is no strict identity check, in technical jargon “Know Your Customer” (KYC), as required for current accounts.
The home market is of enormous importance for Bunq. According to the fintech, almost 60 percent of current account users come from the Netherlands. 20 percent are from Germany. Bunq is active across Europe and is also seeking a banking license in the US, as the fintech recently announced.
Many customers with little income
Nevertheless, the two neobanks have one problem in common: they earn nothing from a significant proportion of their customers. At Bunq, just half of the users generate direct sales. In the 2021 financial statements, N26 described around 3.7 million customers as “earnings relevant”.
N26 continues to face problems in the fight against money laundering. The German financial regulator Bafin has therefore extended the growth limit of 50,000 new customers per month that has been in place since the end of 2021.
The Bunq founder was granted permission by the Dutch financial regulator to run a bank in 2014 – and remains at the helm of the fintech.
(Photo: IMAGO/ANP)
Bunq was founded by Ali Nikman in 2012, a year before the launch of N26. The IT entrepreneur is still at the head of the company.
N26 was in 2021 – these are the last published business figures – the commission result far more important than the interest result. N26 receives fees from merchants when customers make purchases with the debit card, as well as account fees. At the end of 2021, customer deposits at N26 amounted to a good six billion euros.
Transaction fees play a small role at Bunq. According to Niknam, 90 percent of the proceeds come from account prices and interest income.
N26 is worth a lot more than Bunq
In terms of rating, Bunq continues to lag behind N26. After the latest financing round in 2021, the value of N26 was estimated at around 7.7 billion euros. Bunq is valued at 1.6 billion euros. The fintech first raised funds from external investors a year ago.
Measured by the number of employees, N26 is much larger. The Berlin company has 1,500 employees, Bunq had around 430 employees at the end of 2022.
For fintechs with a loss in 2022
Bunq and N26 have been in the red for the past year. At Bunq, the loss was almost eleven million euros, a year earlier it was a good 13 million. For the current year, Bunq is assuming a profit, like black figures, as reported by the Dutch business newspaper “Financieele Dagblad”.
N26 wants to be in the black for the first time in 2024. The loss rose last year after hitting 172 million euros in 2021. In 2023, the loss will be lower, said N26 co-boss Maximilian Tayenthal to the Handelsblatt.
Expansion into the US
Bunq wants to make the leap to the US. The company announced in April that it had applied for a US banking license.
N26 withdrew from the US early last year. 500,000 accounts were affected. The fintech was launched in the USA in 2019, together with the partner bank Axos. N26 had not acquired its own banking license there.
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