A
subsidiary of Allianz SE, the Munich-based insurance group, is looking to sell
approximately 5% of its stake in the German online banking platform N26 at a
considerably reduced price, effectively valuing the company at $3 billion,
according to a recent report from Financial Times.
Allianz X,
the venture capital division of Allianz SE, has enlisted the help of an adviser
to facilitate the sale of its N26 shares, which are now valued at around 68%
lower than the over $9 billion valuation in 2021. This change positions N26 as
one of Europe’s most valuable fintech firms, albeit trailing competitors like
Klarna and Revolut.
While
Allianz X is one of the most prominent external investors in N26, the extent of
its stake in the company remains unclear. The Financial Times suggests
that the sale could enable Allianz to generate nearly $160 million, effectively
tripling its initial investment over the past five years. This figure is based
on estimates derived from publicly available documentation.
N26 told
the Financial Times that it is not presently informed about any ongoing
secondary sales from current investors, including Allianz X. Additionally, the
company stated that it does not provide commentary on any internal policies
that shareholders may employ when determining the value of companies within
their portfolio.
This
development comes amidst increased scrutiny from banking regulators on the
financial stability of lending institutions following the collapse of several
regional US banks and the Credit Suisse bailout by UBS.
Pandemic-Driven Neobank
Boom Fading?
N26 belongs
to a category of financial institutions called ‘neobanks’ or ‘challenger
banks’. These entities operate exclusively online, delivering financial
services via mobile apps and websites instead of physical branches. Neobanks
strive to offer more convenient, accessible, and user-centric banking
experiences by leveraging advanced digital tools and technologies.
Challenger
banks have been gaining traction in recent years, particularly among tech-savvy
younger generations who appreciate flexibility and convenience. Some prominent
neobanks include Chime, Revolut, Monzo, and N26. In 2020, following a $100
million Series D funding round , N26’s valuation reached $3.5 billion. By
October 2021, this figure had climbed to $9 billion.
Although
recent news about N26’s valuation decline might suggest that the neobank boom
is beginning to fade, analysts at AltFi believe that the broader fintech
industry remains unthreatened. Indeed, its funding in 2022 has decreased
compared to 2021, but this is mainly due to a general economic downturn, as
seen in the performance of global stock markets. Nevertheless, last year’s figures are still significantly higher compared to pre-pandemic funding levels.
In
developing countries, one in four citizens uses challenger bank services, while
in Brazil, nearly every second resident does. These services are also popular
in highly developed countries: in Ireland, Singapore, and Hong Kong, 20% of
citizens utilize products from institutions like N26.
|
Country |
Number of |
% of |
|
1 Brazil |
91,719,000 |
43% |
|
2 India |
356,553,704 |
26% |
|
3 Ireland |
1,127,178 |
22% |
|
4 Singapore |
1,194,019 |
21% |
|
5 Hong Kong |
1,482,614 |
20% |
|
6 UAE |
1,779,698 |
19% |
|
7 Mexico |
21,422,384 |
17% |
|
8 Spain |
8,055,468 |
17% |
|
9 South Africa |
9,021,450 |
15% |
|
10 Germany |
11,653,197 |
14% |
|
11 Portugal |
1,448,705 |
14% |
Source:
Seon.io
To combat
the potential industry downturn, N26 introduced new crypto services by
launching a cryptocurrency trading product called N26 Crypto in October of the
previous year. Initially, customers in Austria gained access to the new
features via the N26 app, with other markets being incorporated progressively. By mid-January, N26 Crypto expanded to traders in five more countries: Belgium,
Germany, Ireland, Portugal, and Switzerland. In addition, the company has recently onboarded a trio of female executives to boost marketing and labor relations departments.
A
subsidiary of Allianz SE, the Munich-based insurance group, is looking to sell
approximately 5% of its stake in the German online banking platform N26 at a
considerably reduced price, effectively valuing the company at $3 billion,
according to a recent report from Financial Times.
Allianz X,
the venture capital division of Allianz SE, has enlisted the help of an adviser
to facilitate the sale of its N26 shares, which are now valued at around 68%
lower than the over $9 billion valuation in 2021. This change positions N26 as
one of Europe’s most valuable fintech firms, albeit trailing competitors like
Klarna and Revolut.
While
Allianz X is one of the most prominent external investors in N26, the extent of
its stake in the company remains unclear. The Financial Times suggests
that the sale could enable Allianz to generate nearly $160 million, effectively
tripling its initial investment over the past five years. This figure is based
on estimates derived from publicly available documentation.
N26 told
the Financial Times that it is not presently informed about any ongoing
secondary sales from current investors, including Allianz X. Additionally, the
company stated that it does not provide commentary on any internal policies
that shareholders may employ when determining the value of companies within
their portfolio.
This
development comes amidst increased scrutiny from banking regulators on the
financial stability of lending institutions following the collapse of several
regional US banks and the Credit Suisse bailout by UBS.
Pandemic-Driven Neobank
Boom Fading?
N26 belongs
to a category of financial institutions called ‘neobanks’ or ‘challenger
banks’. These entities operate exclusively online, delivering financial
services via mobile apps and websites instead of physical branches. Neobanks
strive to offer more convenient, accessible, and user-centric banking
experiences by leveraging advanced digital tools and technologies.
Challenger
banks have been gaining traction in recent years, particularly among tech-savvy
younger generations who appreciate flexibility and convenience. Some prominent
neobanks include Chime, Revolut, Monzo, and N26. In 2020, following a $100
million Series D funding round , N26’s valuation reached $3.5 billion. By
October 2021, this figure had climbed to $9 billion.
Although
recent news about N26’s valuation decline might suggest that the neobank boom
is beginning to fade, analysts at AltFi believe that the broader fintech
industry remains unthreatened. Indeed, its funding in 2022 has decreased
compared to 2021, but this is mainly due to a general economic downturn, as
seen in the performance of global stock markets. Nevertheless, last year’s figures are still significantly higher compared to pre-pandemic funding levels.
In
developing countries, one in four citizens uses challenger bank services, while
in Brazil, nearly every second resident does. These services are also popular
in highly developed countries: in Ireland, Singapore, and Hong Kong, 20% of
citizens utilize products from institutions like N26.
|
Country |
Number of |
% of |
|
1 Brazil |
91,719,000 |
43% |
|
2 India |
356,553,704 |
26% |
|
3 Ireland |
1,127,178 |
22% |
|
4 Singapore |
1,194,019 |
21% |
|
5 Hong Kong |
1,482,614 |
20% |
|
6 UAE |
1,779,698 |
19% |
|
7 Mexico |
21,422,384 |
17% |
|
8 Spain |
8,055,468 |
17% |
|
9 South Africa |
9,021,450 |
15% |
|
10 Germany |
11,653,197 |
14% |
|
11 Portugal |
1,448,705 |
14% |
Source:
Seon.io
To combat
the potential industry downturn, N26 introduced new crypto services by
launching a cryptocurrency trading product called N26 Crypto in October of the
previous year. Initially, customers in Austria gained access to the new
features via the N26 app, with other markets being incorporated progressively. By mid-January, N26 Crypto expanded to traders in five more countries: Belgium,
Germany, Ireland, Portugal, and Switzerland. In addition, the company has recently onboarded a trio of female executives to boost marketing and labor relations departments.