Europe’s most valuable FinTech, German smartphone and online bank N26, now has a valuation of $3.5 billion (£2.8 billion) after receiving $170 million in new funding from existing investors, including Tencent, GIC, Valar Ventures, and Allianz X.
The new tranche of investment means that N26 has boosted its value by over $800 million in 2019.
Since launching bank accounts and payment services in October 2018, the company claims to have won more than 200,000 customers in the UK and is aiming for “millions and millions” in the US, says the FT.
N26’s current market valuation is roughly equivalent to total investment in UK FinTechs in the first half of this year, according to the latest report from Innovate Finance. Investment in UK FinTechs in the first six months of 2019 was $3.6 billion (£2.9 billion) – a year-on-year increase of 45 percent, and 85 percent of the total invested last year.
Roughly $3.25 billion (£2.6 billion) of that investment went to London-based companies, says the report – 90 percent of the total. Challenger banks and foreign exchange-focused FinTechs clinched most of the cash, with OakNorth ($440 million), Checkout.com ($230 million), WorldRemit ($175 million), Monzo ($147 million), and Starling Bank ($98 million) being the top five biggest recipients.
Despite the healthy figures, 85 percent of UK FinTech investment this year went into more established players rather than new startups, suggesting that the market is maturing fast. While there have been 30 percent fewer deals over the past 18 months, investment size has increased: further evidence of a consolidating space.
With a potential no-deal Brexit still on the cards, the sector could face problems in terms of the flow of capital and access to a global talent pool, according to Innovate Finance CEO Charlotte Cresswell. The Bloomberg Brexit Tracker suggests that roughly $1 trillion in banking assets has left the UK since the referendum result, with the main beneficiaries being Germany and Ireland.
In related investment news, Irish fintech player Fenergo has raised €66 million (£59.4 million) from a sale of preference shares, while Finix, a San Francisco-based electronics payments startup, has raised $17.5 million in Series A funding.
Meanwhile, Japanese tech conglomerate and serial investor SoftBank has led a $231 million investment round in Brazilian FinTech and lending platform Creditas, valuing it at $750 million.
The investment has been made by SoftBank’s Vision Fund alongside the Softbank Group, although Reuters reports that the latter’s stake will be transferred to the new SoftBank Latin America Fund.
The move could boost competition in the Brazilian banking sector, in which the country’s top five banks hold 82 percent of total assets.
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