April 28, 2025 • 10 mins
German challenger bank N26 was an investor darling, backed by Peter Thiel, Tencent, and Li Ka-Shing. The company, founded in 2014, was one of the original banking disruptors but ran into a major hurdle when German regulator BaFin put a cap on how many new customers it could take due to concerns around money laundering controls. The cap expired last year - N26 has seen a jump in new customers and is forecasting a 40% revenue rise for this year. Bloomberg's Caroline Hepker and Tom Mackenzie spoke to Founder and CEO Valentin Stalf about the bank's bounce on revenue and customer growth, plans to come to public markets, and thoughts on regulation.
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Speaker 1 (00:00):
To the fintech space with a particular lens and what's
happening in Germany En twenty six the German Challenger Bank,
backed by the likes of Peter Teel ten Cent and
Lee Kashing. At the end of twenty twenty four, this
business reported four point eight million revenue generating customers on
its road to recovery. The company, founded in twenty forty,
was one of the original banking disruptors, but ran into
(00:22):
a major hurdle when German regulator Baffin put a cap
on how many new customers it could take due to
concerns around money laundering controls. The cap expired last year,
and twenty six has since seen a jump in new
customers and is forecasting a forty percent revenue rise for
this year. Joining us now very pleased to say is
Valentine staff and twenty six is CEO and founder Valentine.
(00:44):
Good morning, Thank you for joining us. What a turnaround
then for the business? Can I be sustained once out
of valuation back in twenty twenty one of our nine
billion US dollars, When did you get back to that
level of valuation? Given the turnaround that you've seen at the.
Speaker 2 (00:57):
Business, thanks very much for having me. Let's see when
we get back to these valuations. I can say that
the business has developed very well over the last the
last year, actually the last twenty four months already, but
we'll see once we grow into the valuation again. I
think we've seen big corrections over the last year when
it comes to tech valuations, so as founders and we
(01:18):
can only focus on focusing on the business KPIs and
making the business more sustainable, growing revenue, as you mentioned already,
in many more things.
Speaker 3 (01:29):
In terms of just thinking about the cost of that
regulation before we sort of move on and talk about
your future plans, how much do you think that cap
to growth actually costs you in terms of euros?
Speaker 2 (01:43):
So I think obviously it cost us to some extent
new customers weren't able to grow as fast as possible
as we could have seen and as the demand has
been from customers. But at the same time, we've been
learning a lot. We've been exchanging extremely well with the
regulator over the last couple of years, so there's a
lot of a big learn part. I think it's very
hard to put a number exactly too of what it
cost us, but a lot of foregun customers, but now
(02:06):
the time for to gain them back or gain them
the first time.
Speaker 1 (02:10):
Is it an example do you think Valentine of overreach
by German regulators? Is it a case study and how
regulators sometimes overstep at a time and of course when
when you is very much focused post Murray Jarigo report
on the need to innovate.
Speaker 2 (02:28):
I mean in Europe in general, I think we are
not in a in an area of the world where
we have very lose regulation. I think that that is
that is a fact. But as a bank we need
to deal with that. We're in a highly regulated industry.
I think that's a good fact, and I think we
we we build the trust with our consumers because the
industry is highly regulated, so no one needs to be afraid.
(02:51):
At the same time, we also need to work on
how we do a more proactive, proactive steering of companies,
more proactive regulation, and I think that's definitely a thing
to focus over the next year's instead of you know,
backward looking regulation, to do more proactive work together with
the regulators and shape the regulation for the future.
Speaker 3 (03:09):
In terms of the competition in this area. Bloomberg reported
last week on Revelue it's revenue soaring. I mean, I
wonder who you think you know your competitors are Revolute,
Wise and so on, But just thinking about Revolute, their
customer base reached fifty two point five million people at
the end of twenty twenty four, basically more than HSBC.
(03:31):
What do you think of that kind of competition. I mean,
you're still pretty far behind that. How quickly can you
catch up? What do you think about growing your customer
base now?
Speaker 2 (03:41):
I think we are very very focused on the fundamentals.
It's not only about the customer number, but we are
growing our revenue about thirty forty fifty percent on year.
We've done that last year with forty percent growth and
revenue just coming out of the growth cup. We expect
a similar number this year. We already more than half
a billion in revenue year that we will be booking
(04:01):
more than that throughout the year. So I think we're
on a very very good trajectory. I think the opportunity
is even bigger, and I think some of the competition
shows that there's even more opportunity we are set to
catch up on that. We haven't been able to do
that during the growth restrictions. We're there now. But it's
not only about the customer number. It's really about the
customer engagement. It's how much they do with the account
(04:23):
and when it comes to deposits of customer and so on.
We actually the leading neobank around the world in terms
of number of deposits per customer, transaction volume per customer,
and so we have a slightly different position than some of
the others. But I think that the market is still big.
If you look at at how many of the companies
are active in the change banking space in Europe in
(04:43):
all markets and real live in twenty four markets, it's
not many. It comes down to maybe a couple of
a handful of companies. And I think the market is
ready for disruption. Is disrupted right now by us and
by others, and that will continue over the next the
next couple of years.
Speaker 1 (04:57):
What is the timeframe for sustainable profitability at the business?
Speaker 2 (05:02):
So we have been starting profitable quarters last year with
the third quarter, and we're going to continue that. I
think we're going to book a profitable year this year
as well. So I think profitability is there and we'll
continue over the next years.
Speaker 3 (05:17):
Resolutes. Thinking about IPO, might you be looking at that.
If so when time frame obviously are which is always
interested in that.
Speaker 2 (05:24):
Of course, I think we would have liked to see
some of the companies being ready for IPO the last
couple of months, to see them list and get some
data points in terms of valuation. I mean that the
tech industry in general hasn't seen a lot of listings
over the last years, and therefore I think it would
be good to have the next wave. I think we're
not going to be part of this next wave for
the next next year, but we're definitely also aiming for
(05:47):
going more into an IPO in the next couple of years.
So it might be three years from now, might be
a little longer, but that's kind of the time frame
that we are thinking of.
Speaker 1 (05:55):
Okay, so maybe a two two to three year time
frame for listing publicly, and obviously the caps of markets
are challenged on that front right now for all businesses
potentially looking to lists. How are you set for funding, Valentine,
are you looking to raise? Presumably you're looking to raise
again within that time frame.
Speaker 2 (06:11):
So, as I mentioned, the companies actually from the fundamentals profitable,
we are always we have been in the past, and
were also in the future. We're always looking for the
best setup of investors, but not from a business need,
but more from the best capital structure. Currently we're not
not raising, but you know, before an IPOs, it's maybe
likely that you know, one investor will join, maybe another
(06:34):
investor will sell a part. So I think that's more
of the transactions that we might see in the in
the next couple of years.
Speaker 3 (06:40):
We're speaking to Valentine self, who is the founder and
CEO of N twenty six, the Challenger Bank Neo bank
here in Europe. Valentine, I wanted to ask you a question,
perhaps left field, but I think very much of interest
also to our audience on lending to industrial and military companies.
I mean, we've seen Germany talking about reindustrialzation, rearmament. What's
(07:01):
your position on that in terms of facilitating that for customers.
Speaker 2 (07:07):
So I mean today we're not offering accounts to business customers.
We've only been starting to do that for small medium businesses,
So we're not in the business of really financing big,
big product production companies. I think the other players being
better situated to do that. But I think we definitely
in Europe need to think about that. And need to
also help customers to produce goods and the industrial growths
(07:33):
to make Europe even stronger and provide a good financing
and why we can play a part. We'll also try
to play our part in the future.
Speaker 1 (07:41):
What would you prioritize if you were sitting in government,
if you had the leaver's power at your hands, in
terms of policies that would support the tech ecosystem of
Germany and Europe.
Speaker 2 (07:51):
I think, first of all, it's increasing life quality, and
it's the things that most of the people think about
that live in Europe. It's per crass is if you
go to to get a new passport, if you you know,
want to get a driving license. All these these very
simple things that also matter for our employees. And we
are employing more than ninety different nationalities and they all
come to Germany and they come to Europe. We've also
(08:13):
office in Barcelona, and they think, think of, you know,
very very good infrastructure of a digital a digital government,
and then then they go there and they want to
get a driving license and it's it's taking them weeks.
I think sometimes they don't even believe it. And I
think that's really where we need to start. We need
to do the simple things. It's not a question of technology,
(08:34):
it's a question of will of using technology and making
things much simpler for everybody, not the people that come
here to Germany to Europe to work, but also for
the people that are already here that are living here,
to have a better day to day life. And I
think that's the one thing that people should really focus on.
And I think digitalization is going to make your much
more productive and it's it's the future for us.
Speaker 3 (08:56):
In terms of the biggest tech backers of companies here
in you and yours included Peter Teel amongst your investors.
Does the kind of global volatility and markets have you
worried about us investors?
Speaker 2 (09:11):
I think everybody should be kind of worried for the
burreers that are created around the world now with the
terriffs being considered and all uncertainty that you have is
never good for investment, especially long term and everything investors
do long term to invest into tech companies, it's normally
a journey of five, ten, fifteen, twenty years and you
(09:33):
need stability, and I think that's why I think we
need to make sure that there is more stability and
there's less uncertainty, and I hope that politicians around the
world keep that in mind when they take any actions
on tariffs, on any other political decisions that might bring
harm to consumers over the next years.
Speaker 1 (09:54):
Just briefly, you haven't picked up the phone to Peter Tail,
have you. I mean, he's a key supporter of JD. Van's,
the vice President.
Speaker 2 (09:59):
No, I haven't.
Speaker 1 (10:00):
Okay, thank you very much,
To the fintech space with a particular lens and what's
happening in Germany En twenty six the German Challenger Bank,
backed by the likes of Peter Teel ten Cent and
Lee Kashing. At the end of twenty twenty four, this
business reported four point eight million revenue generating customers on
its road to recovery. The company, founded in twenty forty,
was one of the original banking disruptors, but ran into
(00:22):
a major hurdle when German regulator Baffin put a cap
on how many new customers it could take due to
concerns around money laundering controls. The cap expired last year,
and twenty six has since seen a jump in new
customers and is forecasting a forty percent revenue rise for
this year. Joining us now very pleased to say is
Valentine staff and twenty six is CEO and founder Valentine.
(00:44):
Good morning, Thank you for joining us. What a turnaround
then for the business? Can I be sustained once out
of valuation back in twenty twenty one of our nine
billion US dollars, When did you get back to that
level of valuation? Given the turnaround that you've seen at the.
Speaker 2 (00:57):
Business, thanks very much for having me. Let's see when
we get back to these valuations. I can say that
the business has developed very well over the last the
last year, actually the last twenty four months already, but
we'll see once we grow into the valuation again. I
think we've seen big corrections over the last year when
it comes to tech valuations, so as founders and we
(01:18):
can only focus on focusing on the business KPIs and
making the business more sustainable, growing revenue, as you mentioned already,
in many more things.
Speaker 3 (01:29):
In terms of just thinking about the cost of that
regulation before we sort of move on and talk about
your future plans, how much do you think that cap
to growth actually costs you in terms of euros?
Speaker 2 (01:43):
So I think obviously it cost us to some extent
new customers weren't able to grow as fast as possible
as we could have seen and as the demand has
been from customers. But at the same time, we've been
learning a lot. We've been exchanging extremely well with the
regulator over the last couple of years, so there's a
lot of a big learn part. I think it's very
hard to put a number exactly too of what it
cost us, but a lot of foregun customers, but now
(02:06):
the time for to gain them back or gain them
the first time.
Speaker 1 (02:10):
Is it an example do you think Valentine of overreach
by German regulators? Is it a case study and how
regulators sometimes overstep at a time and of course when
when you is very much focused post Murray Jarigo report
on the need to innovate.
Speaker 2 (02:28):
I mean in Europe in general, I think we are
not in a in an area of the world where
we have very lose regulation. I think that that is
that is a fact. But as a bank we need
to deal with that. We're in a highly regulated industry.
I think that's a good fact, and I think we
we we build the trust with our consumers because the
industry is highly regulated, so no one needs to be afraid.
(02:51):
At the same time, we also need to work on
how we do a more proactive, proactive steering of companies,
more proactive regulation, and I think that's definitely a thing
to focus over the next year's instead of you know,
backward looking regulation, to do more proactive work together with
the regulators and shape the regulation for the future.
Speaker 3 (03:09):
In terms of the competition in this area. Bloomberg reported
last week on Revelue it's revenue soaring. I mean, I
wonder who you think you know your competitors are Revolute,
Wise and so on, But just thinking about Revolute, their
customer base reached fifty two point five million people at
the end of twenty twenty four, basically more than HSBC.
(03:31):
What do you think of that kind of competition. I mean,
you're still pretty far behind that. How quickly can you
catch up? What do you think about growing your customer
base now?
Speaker 2 (03:41):
I think we are very very focused on the fundamentals.
It's not only about the customer number, but we are
growing our revenue about thirty forty fifty percent on year.
We've done that last year with forty percent growth and
revenue just coming out of the growth cup. We expect
a similar number this year. We already more than half
a billion in revenue year that we will be booking
(04:01):
more than that throughout the year. So I think we're
on a very very good trajectory. I think the opportunity
is even bigger, and I think some of the competition
shows that there's even more opportunity we are set to
catch up on that. We haven't been able to do
that during the growth restrictions. We're there now. But it's
not only about the customer number. It's really about the
customer engagement. It's how much they do with the account
(04:23):
and when it comes to deposits of customer and so on.
We actually the leading neobank around the world in terms
of number of deposits per customer, transaction volume per customer,
and so we have a slightly different position than some of
the others. But I think that the market is still big.
If you look at at how many of the companies
are active in the change banking space in Europe in
(04:43):
all markets and real live in twenty four markets, it's
not many. It comes down to maybe a couple of
a handful of companies. And I think the market is
ready for disruption. Is disrupted right now by us and
by others, and that will continue over the next the
next couple of years.
Speaker 1 (04:57):
What is the timeframe for sustainable profitability at the business?
Speaker 2 (05:02):
So we have been starting profitable quarters last year with
the third quarter, and we're going to continue that. I
think we're going to book a profitable year this year
as well. So I think profitability is there and we'll
continue over the next years.
Speaker 3 (05:17):
Resolutes. Thinking about IPO, might you be looking at that.
If so when time frame obviously are which is always
interested in that.
Speaker 2 (05:24):
Of course, I think we would have liked to see
some of the companies being ready for IPO the last
couple of months, to see them list and get some
data points in terms of valuation. I mean that the
tech industry in general hasn't seen a lot of listings
over the last years, and therefore I think it would
be good to have the next wave. I think we're
not going to be part of this next wave for
the next next year, but we're definitely also aiming for
(05:47):
going more into an IPO in the next couple of years.
So it might be three years from now, might be
a little longer, but that's kind of the time frame
that we are thinking of.
Speaker 1 (05:55):
Okay, so maybe a two two to three year time
frame for listing publicly, and obviously the caps of markets
are challenged on that front right now for all businesses
potentially looking to lists. How are you set for funding, Valentine,
are you looking to raise? Presumably you're looking to raise
again within that time frame.
Speaker 2 (06:11):
So, as I mentioned, the companies actually from the fundamentals profitable,
we are always we have been in the past, and
were also in the future. We're always looking for the
best setup of investors, but not from a business need,
but more from the best capital structure. Currently we're not
not raising, but you know, before an IPOs, it's maybe
likely that you know, one investor will join, maybe another
(06:34):
investor will sell a part. So I think that's more
of the transactions that we might see in the in
the next couple of years.
Speaker 3 (06:40):
We're speaking to Valentine self, who is the founder and
CEO of N twenty six, the Challenger Bank Neo bank
here in Europe. Valentine, I wanted to ask you a question,
perhaps left field, but I think very much of interest
also to our audience on lending to industrial and military companies.
I mean, we've seen Germany talking about reindustrialzation, rearmament. What's
(07:01):
your position on that in terms of facilitating that for customers.
Speaker 2 (07:07):
So I mean today we're not offering accounts to business customers.
We've only been starting to do that for small medium businesses,
So we're not in the business of really financing big,
big product production companies. I think the other players being
better situated to do that. But I think we definitely
in Europe need to think about that. And need to
also help customers to produce goods and the industrial growths
(07:33):
to make Europe even stronger and provide a good financing
and why we can play a part. We'll also try
to play our part in the future.
Speaker 1 (07:41):
What would you prioritize if you were sitting in government,
if you had the leaver's power at your hands, in
terms of policies that would support the tech ecosystem of
Germany and Europe.
Speaker 2 (07:51):
I think, first of all, it's increasing life quality, and
it's the things that most of the people think about
that live in Europe. It's per crass is if you
go to to get a new passport, if you you know,
want to get a driving license. All these these very
simple things that also matter for our employees. And we
are employing more than ninety different nationalities and they all
come to Germany and they come to Europe. We've also
(08:13):
office in Barcelona, and they think, think of, you know,
very very good infrastructure of a digital a digital government,
and then then they go there and they want to
get a driving license and it's it's taking them weeks.
I think sometimes they don't even believe it. And I
think that's really where we need to start. We need
to do the simple things. It's not a question of technology,
(08:34):
it's a question of will of using technology and making
things much simpler for everybody, not the people that come
here to Germany to Europe to work, but also for
the people that are already here that are living here,
to have a better day to day life. And I
think that's the one thing that people should really focus on.
And I think digitalization is going to make your much
more productive and it's it's the future for us.
Speaker 3 (08:56):
In terms of the biggest tech backers of companies here
in you and yours included Peter Teel amongst your investors.
Does the kind of global volatility and markets have you
worried about us investors?
Speaker 2 (09:11):
I think everybody should be kind of worried for the
burreers that are created around the world now with the
terriffs being considered and all uncertainty that you have is
never good for investment, especially long term and everything investors
do long term to invest into tech companies, it's normally
a journey of five, ten, fifteen, twenty years and you
(09:33):
need stability, and I think that's why I think we
need to make sure that there is more stability and
there's less uncertainty, and I hope that politicians around the
world keep that in mind when they take any actions
on tariffs, on any other political decisions that might bring
harm to consumers over the next years.
Speaker 1 (09:54):
Just briefly, you haven't picked up the phone to Peter Tail,
have you. I mean, he's a key supporter of JD. Van's,
the vice President.
Speaker 2 (09:59):
No, I haven't.
Speaker 1 (10:00):
Okay, thank you very much,
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