German-based challenger bank N26 still on track for 2019 U.S. launch
The Germany-based challenger bank N26 says it’s on track to launch in the U.S. in 2019, despite experiencing a handful of delays.
N26 CEO Markus Gunter told Bloomberg in an interview that the U.S. launch is still scheduled to happen midyear, followed by a launch in Brazil. N26 first revealed plans for a U.S. launch in March 2018 when it raised $123.2 million in a Series C funding round. The company said a June 2018 launch was imminent, with N26 hiring eight employees for an office in New York.
Nicolas Kopp, N26 USA's chief executive, said in June that the U.S. launch would happen later in the year as the company decided to partner with an undisclosed financial institution for a banking license instead of pursuing its own.
However, the U.S. launch never materialized.
N26 again discussed a U.S. launch in January when it raised $300 million in Series D funding to bring its total valuation to $2.7 billion.
“Our original plan was to launch mid-to-late 2018, but we adjusted our timeline to account for various external factors,” a company spokeswoman from N26’s New York office told American Banker. “As this is our first international launch outside Europe, we want to make sure all the factors are in place for our U.S. launch.”
The spokeswoman added that the U.S. launch is on track for the first half of this year.
Meantime, several challenger banks have made inroads into N26's target market of young consumers, and incumbent financial institutions have also launched mobile-only spinoffs.
Chime and Varo Money each have recently completed significant funding rounds to help spur growth. In May 2018, Chime raised $70 million in a Series C funding to raise its value to roughly $500 million. In January, Varo Money completed a funding round worth $45 million.
Chime and Varo claim more than 3 million users between them. Traditional banks have joined the mobile-only movement as well.
JPMorgan Chase launched Finn in July, which is aimed at millennials. Earlier in the year, Citi revamped its mobile app to make it simpler for consumers outside its primary markets to open accounts with the New York-based bank.