Germany’s banking challenger N26 should be ready for an initial public offering (IPO) by the end of this year, according to co-CEO Maximilian Tayenthal,
Maximilian told CNBC that by the end of 2022, N26 should be “structurally IPO-ready,” During an interview with the media outlet (on Monday February 28, which took place on the sidelines of the Mobile World Congress tech conference), Maxmilian said that they are “not stressed to enter the public markets anytime soon.”
He added that the private markets have “proven to be incredibly liquid.”
With head offices in Berlin, N26 provides fee-free checking accounts via an easy-to-use Fintech app. The company competes for market share with major lenders as well as major Fintechs like Revolut.
Maxmilian established the firm back in 2013 with colleague Valentin Stalf, and the duo has since grown the business into a $9 billion company.
Recently, N26 had acquired $900 million in additional capital in order to help it branch out its operations beyond simply retail banking into other key areas such as crypto-assets and even stock trading. N26 now has backing from Coatue and PayPal co-founder Peter Thiel.
N26′s stock market entry might take place around 2024, Tayenthal revealed. But, he clarified that the company is not going to be rushing into anything.
It’s worth noting that international stock markets have seen major volatility during the past few months as investors and traders try to deal with unprecedent inflation socioeconomic uncertainty. It’s quite possible now that we could see even higher interest rates, due in part to the escalating Ukraine-Russia conflict.
Volatility in the global capital markets has raised serious concerns for some firms and they are now postponing or abandoning their previous plans to go public. In January of this year, Dutch file-sharing service platform WeTransfer had decided to not move forward with its IPO plans while citing “volatile market conditions.”
Meanwhile, N26 is currently looking into becoming a publicly-listed firm at a time when traders are quite concerned about the possibility of significantly greater interest rates from the US Federal Reserve and other large reserve banks.
Higher rates can be a bad sign for high-growth tech firms that often depend on debt financing to support their business operations. But Tayenthal pointed out that N26 is not discouraged by the potential rate increases. The firm operates a licensed bank and claims around $4.8 billion on its balance sheet.
If rates actually rise considerably, then N26 won’t have to securing funding via an IPO as the company might become “self-sustaining,” the firm’s CEO claims.
Banking institutions usually take advantage of increasing interest rates, because they are able to make a higher yield on their deposits.
Despite these confident statements, N26 is still an unprofitable business. The firm recorded a total loss of around 150.7 million euros back in 2020.
As reported, managers at Germany’s digital bank N26 are under investigation over fraudulent accounts. As covered in November 2021, N26 said it was exiting the United States. Founded in 2013 and boasting over 7 million customers, N26 is a neobank that had sought to establish operations in the USA – a market that is home to thousands of small and large traditional banks along with large Fintechs.