Berlin-based digital bank N26 is giving up the US business so it is able to focus on the European market.
This means that around 500,000 customer accounts will be closed and these can no longer be used from January 11, 2022
N26 has started to expand to the USA in July 2019, a lot has changed around the world since then.
The digital bank already withdrew from the UK market after previously spending around $ 31 million to enter the market. This decision was justified by the difficulties that came with Brexit.
In a statement, N26 said: “N26’s vision is to build the bank the world loves to use, and the digital banking pioneer will continue to work towards this.”
“Learnings from N26’s two years of growth in the US market are being constantly applied as it further expands its product portfolio and scales its global business.”
“In our industry, the synergy effects when moving from Europe to the USA are not as great as, for example, with WhatsApp, which is easier to internationalize,” said co-founder and co-CEO Max Tayenthal in an interview with Business Insider USA.
“We had to build the bank from scratch, with different licenses, agreements and payment systems. If you’d asked me four years ago, I would have said we’d start in a new market every year. But today I know that one is already complex enough and one should not underestimate this complexity.”
In October, N26 raised $900 million in a funding round which saw the firm claim a valuation of $9 billion.
However, the company had experienced difficulties by being investigated by German regulator BaFin for fraudulent accounts and money laundering, with N26 underestimating security measures applied on account creation.