- German app-only bank N26 raises $160 million from German insurer Allianz and Chinese messaging and payment giant Tencent.
- Series C funding will go towards US and UK launches later this year.
- Fast-growing N26 has 850,000 customers across 17 European markets.
LONDON — App-only bank N26 has raised $160 million from German insurer Allianz and Chinese messaging and payment giant Tencent.
N26 confirmed the Series C funding round, which was first reported by Finextra, on Tuesday. It takes the total raised by the 3-year-old German startup to $215 million.
Berlin-headquartered N26 is an app-only bank launched in January 2015. The startup has grown rapidly and now has over 850,000 customers across 17 countries in Europe, up from half a million last August. It has processed €9 billion in payments to date.
The bank’s rapid growth has attracted global attention and early investors include Valar Ventures, the investment vehicle of Silicon Valley billionaire Peter Thiel, and Horizon Ventures, the investment vehicle of Hong Kong businessman Li Ka-shing. N26 said existing investors took part in the round but didn’t name them.
Valentin Stalf, CEO and cofounder of N26, said in a statement on Tuesday: “We are very pleased to have Allianz X and Tencent leading our Series C. Not only are they powerhouses in their respective fields of financial and internet services, but they also understand the power of intelligent technology and design to disrupt industries.”
N26 said the funding will be put towards international expansion, targeting US and UK launches later this year. Business Insider first reported that N26 was exploring a UK launch last October.
N26 faces competition from local app-only banks in the UK such as Revolut, Atom, Starling Bank, and Monzo, which announced on Monday that it now has half a million digital current account holders.
Solmaz Altin, the chief digital officer of Allianz, said in a statement: “N26 is a clear frontrunner in mobile banking.”
Lin Haifeng, a managing partner at Tencent Investment, said: “We see the increasing demand of digital banking products and services in the European markets and we are delighted to be a strategic investor of N26 to build a long-term partnership and participate in their growth.”
Earlier this month, a survey found a decline in consumer appetite for app-only banks. A study by RFI Group found respondents’ willingness to bank with a digital-only startup fell from 78% at the start of 2017 to just 54% at the end of the year.
The global appetite for digital-only main bank provider decreased from 50% to 44% between the first and second half of last year.
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