German digital bank startup N26’s losses climb 14% to €172.4 million, IPO delayed

Late last year, German digital bank startup N26 pulled out of the US market and shut down its U.S. operations less than three years after its launch. The shutdown affected about 500,000 of its customers in the United States. N26 said the shutdown would enable the startup to focus on its core European business.

But that has not stopped the Berlin-based fintech startup from continuing to lose money. Its losses have widened as the company ramped up spending on fraud controls.

Today, N26 reported its net revenue increased by 67% in the year ending Dec. 31, 2021, to 120.3 million euros. But the startup continued to bleed money during the same year, with its net loss climbing 14% to 172.4 million euros. According to the financial statement released by the company on Tuesday, 28.2 million euros of the total losses came from N26′s non-European Union operations.

But it’s not all bad news for the 9-year-old fintech startup. In 2020, N26 also grew its customer base and stronger customer engagement, and higher interest rates. N26 generated 72.1 million euros in revenue in that year. In addition, N26 continues to narrow its losses. In 2020, the company trimmed its losses from 216.9 million euros to 150.7 million euros.

The $9 billion-unicorn startup is also not giving up on its IPO. The company had previously scheduled its IPO for the end of the year.

N26 previously said it would be “structurally ready” for an IPO by the end of 2022. But Jan Kemper, N26′s chief financial officer, downplays the expectations saying “it could take anywhere from six months to 18 months for the bank to have all the required ingredients in place for it to go public.”

N26 was founded in 2013 by Valentin Stalf and Maximilian Tayenthal to offer mobile banking solutions to customers in the European Union through its subsidiary. Today N26 has more than 5 million customers in 25 markets. To date, N26 has raised more than $1.8 billion from the world’s most established investors, including Insight Venture Partners, GIC, Tencent, Allianz X, Peter Thiel’s Valar Ventures, Li Ka-Shing’s Horizons Ventures, Earlybird Venture Capital, Greyhound Capital, Battery Ventures, and others.

N26 currently has more than 7 million customers in 25 markets. The company also has 10 office locations: Amsterdam, Berlin, Barcelona, Belgrade, Madrid, Milan, Paris, Vienna, New York, and São Paulo, with over a 1,500-strong team of 80 nationalities based across the globe.