N26 erred on globalization and crypto, co-founder admits. Maxim Tayenthal believes that during the €7.8 billion funding round. The fintech should have prioritized the expansion of its services over ‘putting flags’. In additional countries while seeking capital. The co-founder of N26 has conceded that the German online bank attempted. To go global too quickly and consequently missed out on the bitcoin explosion. The company is currently attempting to maintain its position. As one of Europe’s most highly valued fintechs.
This Berlin-based organization, which is one of a wave of European internet lenders. Founded over the past decade to disrupt the region’s banking sector. Counts Valar Ventures, Peter Thiel’s venture capital firm, as well as Chinese billionaire Li Ka-shing. Among its supporters, according to the organization’s website.
As a result of its decision to leave the United Kingdom in early 2020. N26 will cease operations in the United States a decade. After it first began operations in the country. Its rapid geographic development has left it unable to keep up. With the demand for additional services. Like as cryptocurrency trading or catering. To the expanding number of retail investors in the stock market.
If we had started in the United States, would we have been better off concentrating on trade. And cryptocurrency development? According to Max Tayenthal, co-founder and co-chief executive of N26. Who spoke to the Financial Times in an interview, “Looking back, that might have been a fantastic idea.” In recent months, Tayenthal acknowledged that the bank had “stretched ourselves really thin.” But he added that there are “so many other things we can work on. Rather than raising flags in new markets.”
N26 plans to start trading cryptocurrencies this year
Tayenthal stated that N26 intends to launch a cryptocurrency trading business this yea. Followed by a stocks brokerage firm the following year. “We have a strong desire to broaden our product offering. And we have no choice.”
Despite the fact that N26 was valued at €7.8 billion when it raised an additional €780 million. In funding last year, rival fintech Revolut was valued. At more than three times that amount.
German financial regulator BaFin has also criticized the once-promising startup. For a number of problems, including lax anti-money laundering measures. And a lack of transparency.
As a result, the Bank of Finland limited N26’s ability to accept new customers to 50,000 each month. It is only when N26 has “a proper business organization. And [mitigated] risks to the institution’s operational resilience.” That the restriction can be lifted in its entirety, according to BaFin. Which is particularly concerned about “shortcomings in risk management. With regard to IT and outsourcing management.”
BaFin assigned two special officials to track improvements at N26 on its behalf. Which was an unique action at the time.
In his opinion, BaFin’s cap was “a significant restriction” for a bank. That was supported by “growth investors” and saw itself. As a fast-growing corporation, according to Tayenthal. Last year, N26 added an average of 170,000 new customers per month.
“There is a great deal of confidence [among investors] in our ability. To have these growth constraints removed again,” he asserted. And he is sure that the cap will be totally lifted by late summer. “We’ve devised a strategy. “We have a clear understanding of what has to be done. Although we are capable of putting that understanding into action,” he said.
After “massively” enhancing its anti-financial crime powers
“Some aspects” of compliance and internal systems needed to be improved, Tayenthal conceded.
N26’s record funding round last autumn valued the bank at €541 billion. Putting it on par with Commerzbank, Germany’s second-largest listed banking. With €541 billion in assets.
The co-CEO is convinced the group will be ready for a public market listing. By the end of the year, although it is not required.
In other words, when is the ideal time? He questioned, “Do you want to go public. When you still have a lot of money from last year’s fundraising?”