N26 sets sights on future IPO
German online bank N26 has ambitions to list on the stock exchange in three to five years’ time, reports Jane Connolly.
Co-founder and chief executive, Valentin Stalf, has told the Financial Times that the fintech – which has amassed 3.5 million clients since its 2015 launch – plans to eventually apply for an IPO, as part of its aim of building a global brand.
“We want to provide the app that you turn to every day to deal with your financial issues,” he says. “Our goal is ultimately to do for finance what Spotify did for music and Uber did for mobility.”
Easy sign-up processes, free basic bank accounts and app-based services have made N26 popular with young people in Europe, where it has a full banking licence. The company makes it money from premium service upgrades, retailer card fees and overdraft charges.
Last month, N26 launched in beta phase in the US, where Stalf claims to have 110,000 clients on the waiting list, with banking services provided for now by San Diego-based lender, Axos.
N26 has further plans to build on the growing popularity of challenger banks by opening services in Brazil next year. The bank has raised $470 million in investment this year alone.
Stalf, who aims to attract between 30 million and 70 million customers, adds: “Our cost base is about one-fifth or one-sixth of the cost base of a traditional retail bank. Our revenues are also lower but overall we have better margins.”
Earlier this year, N26 was criticised by the German bank regulator BaFin and received a formal order to address a number of shortcomings. There were also reports of poor customer service access and phishing attacks.
Stalf says the issues raised by BaFin have either already been resolved or will be in the coming weeks.