Technology

Fintech N26 raises record funds to innovate its services

N26 announced earlier this week a Series E funding round worth a record $ 900 million (almost € 773 million). The German neobank is now valued at more than $ 9 billion, it said in a statement.

This round of financing was led by New York funds Third Point Ventures and Coatue Management, accompanied by Dragoneer Investment Group and historical investors from N26. It should be used to finance hires in the product, technology and cybersecurity part, as well as to expand its range of mobile banking services.

Fundraising in fintech is increasing, but it is a record amount for a European fintech. The British neobank, Revolut, for its part raised 800 million last August, after a large round of financing in 2020 to reinforce its international presence.

“This recent round of funding confirms that retail banking as we know it has changed,” says Valentin Stalf, CEO and co-founder of N26. “With our new capital, we are in the first position to become one of the largest retail banks in Europe, all without a single agency.”

In the regulator’s eye

But not everything is rosy for the neobank launched in 2015. Although it now has almost 7 million clients in the territories where it operates (mainly in Europe and the United States, through its subsidiary in association with Axos Bank), we We learned that N26 will have to slow down its growth.

In fact, N26 will restrict its acquisitions of new clients. The neobank has agreed with the German regulator to temporarily host “a maximum of 50,000 to 70,000 clients per month,” he explains. This announcement will be the subject of a future decree. The neobank reports that “given the great interest and demand for N26 banking products, it is possible that new customers in certain markets will be temporarily redirected to a waiting list.” FinTech specifies, however, that this will not penalize existing clients.

Not to mention that the neobank is already in the regulator’s eye, according to L’Agefi. The neobank was fined about 4.24 million euros last June by BaFin (Germany’s Federal Financial Supervisory Authority) due to flaws in its money laundering prevention system. N26 reacted, in August, by strengthening its means to combat money laundering and by appointing three experts on these issues.

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