Valentin Stalf, CEO of N26, wearing that $300 million smile (ERIC PIERMONT)

Frankfurt am Main (AFP) – German online bank N26 said Thursday it had raised $300 million to fund its launch in the United States, which gives the firm a valuation of $2.7 billion.

The fundraising round was the biggest ever for a German “fintech” or financial technology firm, business daily Handelsblatt reported.

It also made N26 the nation’s first fintech “unicorn” — or privately-owned technology firm worth more than $1 billion.

The cash infusion “is a big sum, especially for continental Europe,” said David Rosskamp, co-founder of a Berlin-based investment fund targeting startups and an early investor in N26.

Most of the money came from US venture capital firm Insight Venture Partners and Singapore sovereign wealth fund GIC, the bank said in a statement.

“It’s a sign of confidence showing a European firm has managed to convince American and Asian investors of its ability to build a global operation,” judged Rosskamp.

Investor Hendrik Brandis told business daily Handelsblatt that the move was “an accolade for the German and European fintech industries.”

“With fundraising like this, we’re on the same level as the United States,” he added.

– Online-only banking –

N26 lets customers open a bank account in the space of a few minutes from their smartphone or computer, offering a bank card at no extra charge.

Like similar fintech firms, it dispenses with traditional lenders’ network of branches and can charge much lower fees as a result.

The package has so far helped it glean around 2.3 million customers in 24 European countries and grow to 700 employees.

Now N26 says its goal is to become “the first global mobile bank”.

It aims to launch mobile banking in the US “in the first half of 2019” with a long-term goal of more than 100 million customers worldwide “in the coming years”.

British competitor Revolut raised $250 million in April 2018 for a valuation of $1.7 billion.

But as well as budding startups, fintechs have established banks’ growing online operations — sometimes boosted by buying up smaller competitors — to contend with.

The newcomers are squeezed between charging low fees to build a customer base and questing after profitability — something N26 has yet to achieve, investor Rosskamp said.

One avenue of future growth could be in becoming “the Amazon of banks”, offering a user-friendly front-end for banking services from other providers, he added.

“That’s the big vision,” although it represents “a big danger for retail banks.”

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