Germany’s challenger bank and fintech unicorn N26 is gearing up to launch in Switzerland. N26’s CEO and co-founder Valentin Stalf said at the Start Summit 2019 in St. Gallen last month that the startup’s entry into the Swiss market is expected to take place in two to three months.
N26 currently serves 24 European markets but not Switzerland. The company said more than 10,000 people from Switzerland had enlisted for an account as of the end of January.
Markus Gunter, CEO of N26’s banking arm, told Bloomberg in an interview earlier this week that the company is currently prioritizing international growth rather than product expansion, preferring to build up its international customer base first.
“Regional expansion will take precedence over product expansion,” Gunter told Bloomberg. “Some people claim you can’t make money from 20-year-olds, but you can if your costs are low.”
Image Credit: N26
Besides Switzerland, N26’s mid-term expansion plan includes entry into the US and Brazilian markets. The US launch is scheduled to happen mid-year, followed by Brazil. There are no plans to expand into Asia and the company hopes to reach over 100 million clients worldwide in the coming years.
N26 from Berlin was founded in 2013 and provides a free basic current account and debit MasterCard card to all its customers, as well as a Maestro card for their customers in certain markets. Additionally, customers can request overdraft, investment products and premium current accounts. Accounts are managed entirely online or through a mobile app, and N26 does not charge any fees for basic banking transactions.
Since launching its first product in January 2015, N26 claims it has processed more than EUR 20 billion in transaction volume. N26’s 2.5 million customers currently hold over EUR 1 billion in accounts. The company employs more than 800 people across three offices in Berlin, Barcelona and New York.
Image Credit: N26
Some German media outlets have reported that N26 has struggled to keep up with its rapid growth, notably in the areas of security and customer support. For example, N26 only uses a photo-identification procedure for account openings in some foreign markets rather than video technology.
“This approach has been reviewed and accepted by the regulator which is why we want to stick to the process, Gunter said, adding that the company has strengthened its photo identification process.
N26 raised more than US$300 million in venture capital at the beginning of the year, valuing the startup at US$2.7 billion. With its new valuation, N26 overtook Revolut as the most valuable mobile bank in Europe.
Separately, N26 also revealed plans for a US launch in March 2018 after raising US$123.2 million in a Series C funding round. In June, the company partnered with an undisclosed financial institution for a banking license instead of pursuing its own.
Featured image: N26 mobile app and MasterCard card.