The hype around the smartphone bank N26 is great. This year, N26 has already announced another round of financing of $ 300 million. In addition to existing investors, the investment fund GIC from Singapore also participated. With that, N26 broke the magic barrier with a market valuation of $ 1 billion. Are the powerful investments in the banking startup justified?
Increase by 2,000 percent in one year
Some hints are provided by business development figures from the year 2017, which the portals finanz-szene.de and gruenderszene.de encountered.
Accordingly, N26 has generated a total of 11.24 million euros in 2017, of which about ten million euros through commission income. Even if the amount does not sound particularly high in comparison to the current company valuation, the total amount of commission income compared to 2016 is an increase of around 2,000 percent. To classify, N26 was founded in 2013, but only launched in 2015.
With approximately 450,000 customers in 2017, N26 will have an average revenue of 20 to 25 euros per customer. That too sounds little at first. However, fintech offers as its core product a free checking account, which puts the numbers into perspective. Other sources of revenue for N26 are premium accounts with additional services and revenues from partnerships with other fintechs.
Losses are offset by high investments
The net loss for 2017 was € 32 million. Added to this are contaminated sites with losses amounting to 24 million euros from the early years of the startup. Considering that N26 has not only been collecting a lot of money from investors this year, these figures do not seem to matter too much. Renowned investors such as Allianz X, Tencent Holdings Limited, Li Ka-Shing’s Horizons Ventures, Peter Thiel’s Valar Ventures, members of Zalando Management and Earlybird Venture Capital also raised $ 215 million in 2017.
N26 now has more than 500 employees and offices in Berlin, New York and Barcelona. For a long time, an IPO of N26 is in the room. Fintech is not under pressure with the current round of financing, but it is an option, said CEO Valentin Stalf recently in an interview with Die Welt.
Also published on Medium.