(Bloomberg) -- German digital bank N26 GmbH has raised money at a valuation of more than $9 billion, about the same as the market capitalization of Commerzbank AG, the country’s second-largest listed lender.
N26 finished a financing round of more than $900 million led by Third Point Ventures and Coatue Management and joined by Dragoneer Investment Group as well as existing investors, it said in a statement Monday. It was previously valued at $3.5 billion.
The funds will be allocated to offer more services, including trading, and hire additional people.
“We also want to use the money for M&A deals, to either expand geographically or to grow our product offerings,” Chief Financial Officer Jan Kemper said in an interview. “We do not need to develop everything ourselves.”
Dealmaking in the financial technology sector has accelerated as the pandemic intensified investor appetite for online and mobile services. German fintech firms Solarisbank, a provider of white-label banking services, and Wefox, an insurance-technology firm founded by former Deutsche Bank AG staff, have also raised hundreds of millions of dollars this year.
Bloomberg reported in July that N26, which has more than 7 million customers in 25 countries, was eying a valuation of about $10 billion in its latest funding round. Earlier this year, it said it was taking proactive steps toward a public listing in the future. “Within the next one and half to two years, we want to be in the position to pull the trigger on a stock market listing if we decide that is the right thing to do,” Kemper said.
The bank has faced regulatory headwinds in Germany, where it was told to improve its money laundering controls. It was fined 4.25 million euros by regulator BaFin in June because of delayed submissions of suspicious-activity reports.
N26 said Monday it agreed with the German regulator to limit new customer signups to 50,000 to 70,000 a month for the time being. In certain markets, customers may be put on a waiting list. Kemper declined to provide details on the discussions with the regulator.
“Compliance and governance requirements are increasing as we grow, and we first want to do our homework here,” he said.
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