An app-only bank backed by Peter Thiel is launching in the UK - and it's targeting the US next
- German app-only bank N26 is launching in the UK on Thursday.
- The startup, which is backed by Peter Thiel's Valar Ventures, already operates in 17 countries across Europe and has 1.5 million customers.
- N26 plans to launch in the US early next year and wants to "build the world's first global bank with maybe 100 million customers."
LONDON - German app-only bank N26 on Thursday announced plans to launch in the UK as it continues its rapid expansion across Europe.
N26, which first launched in Germany in 2015, said it plans to run a "beta" testing phase before rolling out to its 50,000-strong UK waiting list in the coming weeks.
"I think we have a fair chance to make the UK one of our strongest markets," N26 cofounder and CEO Valentin Stalf told Business Insider in a recent interview. "The experience that we've gained in the other markets [means] we are very confident."
N26 was founded in Berlin, Germany, but currently operates in 17 markets across Europe. It has 1.5 million customers and Stalf said the bank is signing up 5,000 to 6,000 new customers a day.
"The big things that we've learned is that the needs of the customers are very much the same independent of which country they're in," Stalf said. "There's this hypothesis that banking is very local. I think this hypothesis is kind of wrong. The needs of - especially the digital generation - are kind of the same all around Europe, even all around the world I would say."
Britain already has several digital-only banking startups targeting consumers, including Monzo, Revolut, Starling, Tandem, and Atom. Stalf said he was not worried about competition.
"If you look at the markets we're in already, most of the customers we win, the people are not coming from other digital banks but they're coming from the traditional banks," he said. "If you look at the UK, I think 75% of the market is with the four big banks. The primary goal is to really give these people a better user experience, no rip-off pricing, and more transparency."
Stalf said that N26, which has a full banking license from German regulators, will differentiate itself from others such as Revolut and Tandem by positioning itself as a full replacement for a bank account.
"We've our own banking license in Europe, we'll offer all the sort codes and full account functionality," he said.
N26's next goal is to launch in the US in the first quarter of 2019.
"We have the ambition to build the world's first global bank with maybe 100 million customers," Stalf said. "We think the time is right to build a global banking brand. You have that with Spotify and Netflix in movies or music, but you don't actually have it in finance. In finance, the underlying product is much more profitable than music or movies."
The startup has raised over $200 million from backers including Tencent, Allianz, Peter Thiel's Valar Ventures, and Horizons Ventures, the venture capital business of Hong Kong billionaire Li Ka-Shing. It is already processing over €1 billion in monthly transactions.
"Building a bank that people love to use is our vision. It's for our generation," Stalf, 33, said. "That also makes a difference to most of the traditional banks."