Digital bank N26 has eclipsed Revolut’s meteoric $1.7 billion valuation with its own $300 million fundraise today that slaps a $2.7 billion price tag on the German bank.
With 2.3 million users across Europe—fewer than Revolut’s claimed 3 million—N26 says the funding will supercharge its plan to launch in the U.S. early this year.
“One clear focus we have for the first half of next year is entering the U.S. We have an office in New York established for almost a year, we have a team of 20+ people already working on our expansion,” Alex Weber, N26’s head of international markets, told Forbes in December.
Weber said the bank’s U.S. waiting list was already “growing significantly.”
Today’s $300 million fundraise has also been labeled by N26 as “largest private equity financing round for a fintech company in Europe,” a claim that’s backed up by the available data on Pitchbook.
The Series D round is led by New York-based Insight Venture Partners—a telling investor for the bank’s U.S. ambitions—which joins N26’s existing roster of high-profile investors including Chinese giant Tencent and Peter Thiel’s Valar Ventures.
N26 now operates in five languages across 24 countries with 700 staff, most recently launching in the U.K. in October with a high-profile marketing blitz across the capital.
While concerns have been raised around the profitability of digital banks like Monzo and Starling, which currently make their money from lending, N26 has a subscription business model similar to Revolut.
N26’s basic current account is free, while “Black” and “Metal” cards include higher ATM withdrawal limits overseas and perks such as travel insurance and WeWork membership for a monthly fee.
“In Germany and Austria we also have overdrafts and consumer credit, in France we have consumer credit, and we will be bringing overdrafts to the U.K. very soon,” said Weber.
Another way N26 is trying to differentiate itself from rivals in the increasingly crowded mobile banking space is by presenting itself as more “mature”–in more ways than one.
“Our average customer is 31 years old. We also just recently surpassed €1 billion in deposits, so if you’re thinking about average balances and how people actually use the product, it’s much more mature.”
The implication from Weber’s comments is that more people are using N26 as their primary bank account, while in the second quarter of 2018 just 2,702 people switched their primary current account to Monzo according to the U.K.’s Current Account Switching Service.
All that said, the U.S. market is a different beast entirely. Few European fintechs have yet to make any headway due to the regulatory hurdles, banking environment and a radically different consumer market on the ground.
Now as Europe’s best-funded fintech, time will tell if N26 has what it takes.