Thiel-Backed Bank Valued at $3.5 Billion Amid U.S. Launch

A German smartphone bank backed by billionaires Peter Thiel and Li Ka-shing has raised new funds at a valuation of $3.5 billion, making the company one of Europe’s highest valued non-listed fintech firms.

N26 GmbH extended its Series D funding round by $170 million to a total $470 million, the Berlin-based company said on Thursday. The round was originally announced in January at a valuation of $2.7 billion. All previous Series D investors including Insight Venture Partners and Singapore’s sovereign wealth fund GIC participated in the extension.

“An IPO is a scenario we can envision for the future, but I don’t expect our most recent round of financing to have been the last,” N26’s co-founder Maximilian Tayenthal said in an interview.

The new valuation brings the company up to par with payment firms Klarna Bank AB and TransferWise Ltd. which each claim to be valued at $3.5 billion. British rival Revolut Ltd. stands at $1.7 billion.

“The notion that the best consumer startups are all born in Silicon Valley is increasingly outdated,” according to James Fitzgerald, general partner at N26 investor Valar Ventures in New York City.

N26, which serves over 3.5 million customers, wants to use the additional funds to drive expansion. Last week, the firm launched its mobile-banking app in the U.S., its first market outside Europe. It plans to start in Brazil in 2020 and aims to reach over 50 million customers worldwide in the coming years.

“We want to build a global retail bank. This means that we will also expand into some Asian markets at a later time,” said Tayenthal. “The company as a whole isn’t profitable yet because we’re investing a lot of money. That will probably not change in the next three, four or five years.”

Within the last 12 months, the startup has tripled its workforce to more than 1,300 employees and will continue to hire for its locations in Berlin, New York, Barcelona, Vienna and Sao Paulo.

In May, German financial regulator BaFin ordered N26 to take steps to improve its internal security. The company “has to ensure the existence of adequate personnel and technical-organizational equipment in order to comply with its obligations under money-laundering law,” BaFin said at the time.

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