Germany-based N26 is about to close an $800 funding round after months of speculation, Business Insider reported. The capital infusion will more than double the challenger bank’s previous value of $3.7 billion.
The round is being led by Coatue, Third Point Capital and Dragoneer, according to the report.
N26, founded in 2013 and backed by PayPal billionaire Peter Thiel and Hong Kong businessman Li Ka-shing, enables current accounts and ATM withdrawals through a debit card to customers in the U.S. and Europe, the report stated.
The bank’s new fundraise would put the company at a lower valuation than Revolut, its larger competitor from London. Revolut is valued at $33 billion and is backed by Soft Bank Vision Fund 2 and Tiger Global, according to the report. N26 previously raised around $820 million from investors.
The bank entered the U.S. market two years ago and has 5 million customers globally. There are currently 250,000 in the U.S., the report stated.
The path to close funding for N26 involved the bank initiating talks with prospective investors in June, although there have been several hurdles, according to the report. The company was fined $5 million by BaFin, a German financial regulator, over anti-money laundering (AML) reporting irregularities. That happened after a tightening of controls brought on by the Wirecard fraud scandal in June 2020.
In May, BaFin assigned a special supervisor to monitor the bank.
Read more: N26 Fined Almost $5M for AML Deficiencies
N26 paid the penalty by July, saying in a statement that the fine related to the late filing of around 50 suspicious activity reports in 2019 and 2020 and that it would be strengthening its anti-financial crime controls.
N26 has also seen a rash of departures by senior executives, as well as accusations that the company dealt in uneven pay and unfair equity package distribution, the report stated.
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