N26 said on 18 October that it raked in more than $900m in a funding round that values the Berlin-based digital bank at more than $9bn, as it agreed to new restrictions with Germany’s financial regulator.
The company said the Series E round was led by New York-based technology investors Third Point Ventures and Coatue Management, and joined by Dragoneer Investment Group as well as existing N26 investors.
The valuation is considerably higher than at its Series D funding round in May 2020, when N26 said it was valued at $3.5bn.
Since then, N26 has applied for a Financial Holding Company license as it eyes an initial public offering.
“With our fresh capital, we are in pole position to become one of the biggest retail banks in Europe, all without a single branch,” N26 Chief Executive Valentin Stalf said.
The fintech, founded in 2013, said it would use the latest funding to expand its mobile banking offering and hire 1,000 new staff in the coming years focused on product, technology and cybersecurity. The company currently employs around 1,500 people across 10 offices worldwide, it said.
“We are excited to provide capital and strategic support to accelerate N26’s work to make digital retail banking accessible to millions” said Heath Terry, a partner at Third Point Ventures.
N26 also said it agreed with Germany’s financial watchdog BaFin to temporarily take on a maximum of between 50,000 and 70,000 customers a month.
BaFin in June fined N26 €4.25m ($5.0m) related to the delayed submission of suspicious activity reports “in the area of anti-money-laundering,” in 2019 and 2020. N26 announced the payment of the fine in September.
The regulator had said N26 needed to beef up its internal safeguards to prevent money laundering and terrorist financing, including by rectifying deficiencies in IT monitoring and customer due diligence.
N26 said the new rules may mean that new customers in certain markets may be temporarily redirected to a waiting list. Existing customers won’t be affected, it added.
Write to Ed Frankl at [email protected]
This article was published by Dow Jones Newswires