FinTech: German Fintech And NeoBank N26 Calls It Quits In The US

November 19, 2021 | FinTech, Latest News, News

On 11 July, 2019, N26 soft launched in the United States, initially allowing customers to sign up for a waiting list. Just over two years later, that’s water under the bridge.

A month after successfully closing a monster $900 million round that valued it at more than $9 billion, German fintech and challenger bank N26 has announced it is shuttering the US business that it launched in July 2019. It is the latest setback for the company, which has had long-standing issues with German regulator BaFin, and exited its UK operations last year after that country pulled out from the EU. (CNBC)

N26 shutters US operations; Europe the priority

In a statement issued Thursday, N26 informed US customers its digital banking would not be available effective January 11, 2022, and said “it continues to sharpen its focus on its European business, with an emphasis on expanding its offer beyond its current accounts to cover additional financial products and services.”

The bank said it would enter new verticals in digital banking, including investment products, and was eyeing an expansion into new markets in Eastern Europe.

“US customers will be able to use their accounts as usual until January 11, 2022, and will receive further instructions on how to withdraw their funds to ensure a smooth transition,” the bank said.

In the US, the neobank had to lay off 10% of its New-York based manning on account of the pandemic.

Later, Nicolas Kopp, the head of its U.S. operations, quit the fintech.

Massive funding, hostile regulator

Last month, N26 raised over $900 million in a round led by Third Point Ventures and Coatue Management, with participation by Dragoneer Investment Group as well as existing investors.

The company said the “record-breaking” round valued it at more than $9 billion, placing it within the top 20 global fintechs, and the most valuable one in Germany.

Unfortunately, N26 announced, around the time of the above raise, that BaFin had imposed a ceiling on the number of new customers the lender could onboard on its platform – a maximum of 50,000 to 70,000 per month – far below the average 170,000 clients joining up with N26 through this year.

BaFin also appointed a special supervisor earlier this year to oversee the implementation of improvements in anti-money laundering controls it had ordered at N26.

Related Story: German Fintech And Banking Challenger N26 Raises $900M At $9B Valuation

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