N26 Sets Sights On Acquisition After A Stellar Year

German online bank N26 spent the pandemic shaping up for success, undeterred by any economic shifts. Despite some minor setbacks (which included pulling out of the U.K. market following Brexit), the neobank managed to fill a treasure chest of funds and reduce losses. With the company in order, N26 has set its sights on a potential fintech acquisition.

Founded in 2013 by Maximilian Tayenthal and Valentin Stalf, N26 has rapidly become a key challenger bank in the European region, valued at $3.5 billion and providing stiff competition to its peers Revolut in Europe and Chime in the U.S. Credited for redesigning banking in the 21st century, N26 has raised a total of $800 million to date from major investors that include Chinese tech giant Tencent and known billionaires such as Peter Thiel and Li Ka-shing. Earlier this year, the fintech surpassed 7 million customers across Europe and the U.S. This increase was more than doubled from the 2 million customers reported in January 2020.

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These successes come from the company’s strategic focus, which in 2020 included improving and scaling digital banking offers to anticipate and stay abreast of the changing needs of consumers during the pandemic. As digital solutions were increasingly sought, N26 rose to the challenge. 2020 saw the company deliver more features, improve service, and focus on delivering a customer experience with satisfaction through every transaction. Tap-to-pay options with a smartphone wallet and the ability to automate recurring payments to any nominated receiver proved that the company enabled simple financing.

As a result, the company’s gross revenue has continued a steady trajectory while losses were trimmed from €165 million in 2019 to €110 million in 2020. With losses reduced as funds were raised, the company has not been shy to discuss acquisition plans.

On what exactly they are looking for, N26’s Co-CEO, Tayenthal said, “It could be players that are strong in certain areas; think about trading, think about KYC (know your customer). There could be other fintechs; challenger players in our space that have a good customer base.” Tayenthal also shared that the company intends to hire an additional 200 employees this year which will bring its current staff tally up to 1,700 globally. Strategically, the company also acquired a banking license to expand in Brazil, where a large potential market has been identified.

In arguably one of the most competitive and fast-growing spaces of the moment, fintechs face a lot of challenges in remaining competitive. However, N26 has proven that it has the competitive edge and strategic follow through to keep on top of the wave.