N26

Berlin-based N26 provides digital banking services to both the B2C and B2B segments via a web portal and a mobile app. Under both segments, the company operates a freemium/subscription-based business model, offering its products under four different tiers. “N26 Standard,” its most basic package, is offered free of charge and offers checking accounts, which includes a virtual debit card, free payment options in any currency, and PFM tools that provide users with insights on spending patterns. Packages with additional features are priced at EUR 4.9–16.9 per month and include features such as physical debit cards, insurance products, investment products, and the creation of sub-accounts under one main account and unlimited cash withdrawals in any currency worldwide. The company also offers a savings account that was initially launched in Spain, with plans to gradually roll it out across Europe. These accounts offer a 2.26% yield on savings up to EUR 50,000 (as of May 2023), with customers being able to access their funds at any time. Furthermore, these accounts do not have minimum deposit requirements, additional fees, or the necessity of direct salary remittance into the account. It also offers Instant Savings accounts in 13 European countries.

The company claims that new bank accounts can be opened within eight minutes via its platform, and it allows users to instantly top up their N26 accounts using credit and debit cards and digital wallet options. The platform also enables users to integrate their accounts with payment services such as Apple Pay and Google Pay, allowing users to make payments via their smartphones.

The company also provides a cryptocurrency trading platform accessible via its mobile app. As of January 2023, the platform was available to customers in Austria, Germany, Switzerland, Belgium, Portugal, and Ireland. The company will charge Metal customers a 1% and 2% transaction fee for trading Bitcoins and other cryptocurrencies, respectively, while all other users will be charged an additional 0.5%. In addition, it also offers a stock and ETF trading platform within its mobile app, available for customers in Austria and Germany. It charges EUR 0.90 per trade.

N26 operates under its own banking license in Europe. In November 2021, it announced plans to discontinue its US operations and exited the market in early 2022. Moreover it planned to wind down its operations in Brazil by the end of 2023. Instead it chose to focus exclusively on the European market, particularly Germany, France, Italy, Spain, and Austria.

Key customers and partnerships

As of November 2023, N26 served more than eight million customers across 24 markets.

N26 has entered into various partnerships to enhance its product offerings. It partnered with Stripe to enable account top ups and it also aimed to leverage the latter’s network to accelerate its own geographic expansion. In addition, it collaborated with Bitpanda to launch its cryptocurrency trading platform. Furthermore, N26 partnered with Upvest to launch a new investment platform.

Funding and financials

In October 2021, the company raised USD 900 million in Series E funding, co-led by Third Point Ventures and Coatue Management. The round valued the company at USD 9 billion (around 2.5x higher than its reported valuation in May 2020). The new funds were intended to be utilized to further strengthen its product offering and grow its workforce, with plans to add over 1,000 new roles in the areas of product, technology, and cybersecurity.

In FY2021 (ending 31 December 2021), the company recorded net revenue of EUR 120.3 million (up 66.9% YoY), due to significant growth in net interest income (up 100.7% YoY) and net commission income (up 58.1% YoY). It reported an operating loss before risk provisioning of EUR 156.3 million (up 10.2% YoY), and a net loss of EUR 172.4 million (up 14.4% YoY), primarily due to a 47.0% increase in administrative expense. It also reported its transactional volumes improved 59.0% YoY to EUR 80 billion during the year, while its deposit base grew to 52.5% YoY to EUR 6.1 billion.