Introduction
Challenger bank, N26, has recently announced it has raised $900 million in a new round of funding. Led by Insight Venture Partners and GIC, the massive funding marks N26’s latest step in its global expansion plans. The banking start-up is now valued at $3.5 billion and plans to use the latest funds for product development, research and development for its core banking service and a major drive to recruit worldwide talent.
The German bank currently serves 5 million users throughout Europe but plans to expand its services to the UK and the U.S. within the next six months. And with this new round of funding from investors like Peter Thiel’s Valar Ventures and 10 Family offices from around the world, N26 is well on its way towards becoming one of Europe’s largest Fintech companies ever built.
Believing that established banks should rely less on physical experiences while providing secure digital services in real-time, N26 hopes that implementing this strategy will give them an edge over their competition as they move into markets outside Europe and look to take on larger incumbents head on. With this new injection of capital in combination with a strong focus on recruiting expertise in global markets, N26 will be among one of Europe’s most prominent fintech players within the next few years.
N26’s Growth and Funding
Germany based challenger bank N26 has raised $900 million in its latest funding round, valuing the company at $3.5 billion. This latest funding round was led by US investor Accel and comes as part of N26’s plans for a global hiring spree to expand its business further.
The company will hire around 1600 new staff in the next two years, focusing on engineering, research and product development.
Let’s look closer at N26’s growth and the funding round that enabled it.
Overview of N26’s growth
N26 is one of Europe’s largest digital banks and is rapidly increasing its users. As of this writing, N26 now has 5 million customers in 24 countries and is expanding its international presence by adding services in Canada, the UK and Brazil.
In 2019, N26 tripled its user base to reach over 6 million customers. With these milestones achieved, the company announced that it had raised $680 million in a Series D fundraising round – with a total amount of $860M since beginning operations in 2013. This funding enabled N26 to grow its global workforce from 2,600 to more than 4,400 people worldwide by 2021 and expand services in 10 additional countries, bringing their international presence up to 35 countries globally.
Over the past year and a half, the focus shifted from customer growth and user acquisition to deeper product offerings such as savings accounts, investments, and insurance products across numerous European markets, making N26 one of Europe’s most valuable fintechs with a market capitalization close to the €7 billion mark.
Having successfully crossed these milestones, N26 continues developing ways for customers to open accounts faster while continuing its global expansion into new markets such as Australia, New Zealand and Singapore with more new markets expected. Moreover they have also secured a European banking license and an e-money license in Singapore.
N26’s latest funding round
N26, a Berlin-based digital payments provider, recently announced that it had raised $900 million in a funding round led by Insight Partners and Tencent Holdings. This is the first time N26 has raised money since it closed its $500 million Series D financing in July 2019.
Insight Partners and Tencent led this latest fundraising. The new investment will help to accelerate N26’s investments into product innovation and expanding its current customer acquisition process. In addition, this funding round confirms the consolidation of N26’s rapid growth platform for global financial innovation. The investment will also allow N26 to further build their world-class customer experience, strengthen their ability to fuel product development, and provide more personalized services for instant access to user activities across all products and services.
Furthermore, the company intends to use this new capital injection to fund an aggressive international expansion plan as they become a pan-European digital bank with global ambitions. As part of this drive, N26 plans on growing its team by 30% worldwide through 2021 with hiring mostly focused on deep technical talent in engineering and roles within operations and product creation.
Challenger Bank N26 Raises $900M as It Prepares for a Massive Global Hiring Spree
Digital banking challenger N26 has just pulled off one of Europe’s largest rounds of private equity this year, raising $900 million in a fresh round of funding. The newly-minted cash will support the company’s expansion plans.
N26 is targeting the U.S. and the U.K. first, with plans to enter up to 30 countries by the end of 2021. After that, the company’s plans involve a massive global hiring spree to get the most out of this round of funding.
N26’s plans for global expansion
N26, one of Europe’s largest and most successful fintech companies, recently announced the closing of their round of Series D funding. With this new $900 million in funds, N26 plans to form a powerful global bank by making strategic investments in technology, continuing to enter new markets and building more sophisticated products with faster innovation cycles.
The company will use the funding to extend its presence beyond Europe and into even more countries worldwide. As a result, N26 is aiming to launch in 30 additional markets within the next five years. This rapid expansion plan is designed to make N26 an even more suitable choice for customers worldwide.
Alongside this massive expansion into global markets, N26 also has plans for product development and increasing their team’s capabilities by hiring staff from different parts of the world such as North America and Asia Pacific. The team aims to leverage expertise from different cultures to create smarter banking experiences that better meet customer needs across all markets.
Following this expansion, N26 wants to further develop innovative products by utilizing their artificial intelligence (AI) and machine learning (ML) expertise. With these tools they can tap into customers’ financial transactions to create tailored offerings which can enhance their overall banking experience. While developing these improved experiences, they also seek ways to increase corporate user security through investments in advanced technologies such as biometrics.
This latest injection of capital will allow N26 to continue its growth and stay ahead of other emerging fintech companies as it positions itself as a leader within the industry. Moving forward with their current success demonstrates a promising future for them and increased investments from venture capitalists reflects confidence in their ability make banking services more accessible globally — something that doesn’t go unnoticed by customers or competitors alike!
N26’s plans for hiring
N26 has recently announced a planned expansion in the form of a massive global hiring spree, after raising $900 million in funding. This signifies that the company is well-funded and highly confident in its position within the international fintech sector.
The most quantifiable way that N26 will realize their global expansion plans are through their workforce. The company plans to double its workforce from 2,500 to 4,500 by 2021. This hiring surge will see N26 recruit talent from around the world for positions like product engineering, customer service and design strategy. They have also confirmed that they will be opening offices in all of their currently served markets, including London rather than Ireland, where some operations are currently based.
At least half of new hires will be located outside Europe, focusing on established markets like Australia or new markets like Brazil, Mexico, Canada and India – countries where N26 doesn’t yet operate but hopes to expand into soon.
Therefore it is clear that expanding their team is a key driver for the growth of N26 as they actively seek further international success by recruiting staff in different countries.
Challenges Ahead
The fintech challenger bank N26 recently secured $900 million in a financing round and is now preparing for a massive global hiring spree. However, despite the support, N26 still faces some challenges.
This section will discuss the potential challenges that N26 will have to overcome to succeed.
Regulatory challenges
N26 is taking advantage of recent regulations that have made it easier for challenger banks to offer digital financial services to customers. However, they must still meet the guidelines established by governmental institutions and banking authorities. In addition, because the banking industry is highly regulated, these organizations must ensure that customer funds are stored in dedicated accounts – split accounts – a strategy which helps minimize risk and ensures customers’ money remains available.
Challengers like N26 also need to comply with regulatory reporting requirements, such as GDPR and compliance in other geographic markets. However, it can be costly and time consuming for challenger banks to stay current with all the regulations across global markets. In addition, there are also regulations related to new standards such as PSD2 (Payment Services Directive 2) designed to help make financial services across Europe more secure. Still, the onus will be on challenger banks like N26 to ensure their systems remain compliant with these new standards.
In addition, risk management is key for any challenger bank as they become increasingly popular in various markets. Banks must remain diligent in protecting customer information and data security while providing convenient digital solutions. Lastly, establishing a presence in foreign markets may prove difficult due to language barriers, cultural nuances or even economic concerns so post market entry strategy will be important for N26’s continued success abroad.
Competition
N26’s main European competitor is Revolut, which has raised over $1 billion in funding and recently launched a U.S. offering. N26 has also launched its app in the U.S., called N26 Money. But strong competition from traditional players is also expected in the highly competitive banking landscape.
In the U.S., the three biggest banks—JP Morgan Chase, Bank of America and Wells Fargo—have a combined market share of 24%, and they are hardly letting new entrants into their market easily. They have all invested heavily into their digital offerings over the years, bolstered by decades of investments these three big institutions control an estimated 70% of deposit accounts in the US
Also, large tech companies including Google , Apple and Amazon have been launching their banking offerings recently as part of their larger business strategy that encompasses creating an all purpose customer management services platform with bundling cross selling opportunities across multiple product categories such as financial services & insurance products, online payments system & ecommerce offerings etc.. This rise in competition from tech companies might be another impediment for N26 to gain entry into mature markets such as USA .
In addition, N26 will also face challengers from incumbent neobanks such as Chime and emerging players striving to provide similar + better customer experiences at fraction of operational cost leveraging cloud technologies for scalability.
Conclusion
The German-based technology-driven bank, N26, has raised $900M in funding as it looks set to expand its global presence. Insight Venture Partners led the round. It included existing venture capital firms DST Global, Tencent Holdings and Allianz X. This influx of capital will allow the firm to accelerate their ambitious plans to scale up operations in other countries – including the United Kingdom, the United States and Brazil – as part of their growth strategy for 2020.
N26’s aggressive expansion program is also supported by a massive hiring spree planned for this year with 10,000 new roles. The additional staff will help support the customer service teams who manage customers across Europe and globally.
Considering all these factors, it is clear that N26 is well-positioned to capitalize on market opportunities as consumer demand increases across international markets. With an eye on delivering innovative digital banking solutions worldwide, consumer confidence in technology-led banking services looks set to reach new heights in 2020 and beyond with N26 leading the way!
tags = Challenger Bank N26, Raises $900M, Massive Global Hiring Spree, IPO, berlinbased n26 900m 7mdillettechcrunch, Mobile banking and the larger fintech space, Germany
