The mobile-first bank N26 in Berlin has raised $160 million in preparation for its launch of a challenger bank in the United States.

Allianz X, the digital investment unit of Allianz Group, and Tencent Holdings, the investment conglomerate that owns WeChat, co-led the Series C funding round.

All told, N26 has raised $215 million. Previous investors have included Peter Thiel’s Valar Ventures, Earlybird Venture Capital and Li Ka-Shing’s Horizons Ventures.

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N26 seeks "a trusted brand name; we want our deposits to be FDIC-insured, and we’re looking for a partner that has a similarly innovative mindset to us,” CEO Nicolas Kopp says in discussing the German company's quest for a partnership with a bank in the United States.


Part of the $160 million will be used on product development for the existing offering in Europe, according to U.S. CEO Nicolas Kopp. The rest — and he would not say how much this is — will be used for international expansion, most immediately into the U.K. and U.S. markets.

N26 started out with the notion of creating a prepaid card for teenagers and their parents. It realized the features its developers were building, like real-time spending notifications, could be used by anyone.

It officially launched in Europe in January 2015 and now operates in 17 countries. It has acquired more than 850,000 customers; its goal is to reach more than 5 million customers by the end of 2020.

It is building its U.S. operation from a New York City base where it has “somewhere under 10” employees.

“We’re in a hiring ramp-up — we need the best people to bring the product to market here in the U.S.,” Kopp said. The company is looking for people in marketing, engineering, product development and operations.

N26 has also been searching for a U.S. banking partner.

“We’re looking for a trusted financial institution that’s large enough to absorb a high volume of customers,” Kopp said. “We’re also looking for a trusted brand name; we want our deposits to be FDIC-insured, and we’re looking for a partner that has a similarly innovative mindset to us.”

The plan is to announce the U.S. company in the second half of 2018.

Kopp intends to bring the German bank’s focus on transparency and simplicity to the U.S. He’s also going to introduce savings features in N26 products because research has found that Americans are terrible at saving; Europeans are five times better at it.

N26 will also offer real-time services, Kopp said.

“A lot of banking today still doesn’t happen fully real time,” he said. “Millennials and Gen Z appreciate fully real-time products — we’re used to on the spot, on the go all the time, and that’s something N26 focuses on as a mobile company and something that here in the U.S. we’ll preach and make sure our product reflects.”

N26 also plans to build an array of financial services that can be accessed by mobile phone, including lending products. In Europe, N26 partners with TransferWise for foreign exchange, Raisin for savings, Clark and Allianz for insurance, and auxmoney for credit. It also wants to use artificial intelligence to recommend products to customers that are beneficial to them, based on their life situation.