N26 set to scoop investment from Spotify investor Dragoneer

A mega funding round is a badge of honour for a digital bank and N26 is reportedly raising its latest.

According to Sky News, the German digital bank looks set to receive a “substantial sum of money” from early Spotify investor Dragoneer Investment Group.

Thanks to the rumoured investment, N26 would see its valuation jump to $10bn—up from $3.5bn—making it one of the most valuable startups in Europe.

Since 2019, N26 has raised roughly $600m, the lion’s share of which comes from a massive $570m Series D, which the bank has now extended three times, the bank previously added another $100m in May 2020.

In March 2021, it was revealed that N26 had further topped up its Series D with a  €30m boost to its latest funding effort.

Most of the funding came from long-time investor VC firm Earlybird and the family behind jewellery powerhouse Swarovski invested in the bank for the first time through its subsidiary, asset manager Crystalon Finanz AG.

N26 has also recently brought a new CFO on board, with Maximilian Tayenthal being promoted to the co-CEO role with fellow co-founder Valentin Stalf.

Dr Jan Kemper, the former CFO of e-commerce platform Zalando, stepped into the role to help N26 work towards its inevitable IPO.

The digital bank has also solidified its international expansion plans, securing its Brazilian banking licence earlier this year to take on native challenger bank Nubank.

As a result of its costly international expansion plans, N26 also saw losses for 2019 and 2020 reach a whopping €165m and €110m, respectively.

According to the bank, its launch in Brazil cost €25m, while its failed UK expansion plans cost nearly €27m.

Earlier this year, N26 also found itself in hot water with the German regulator BaFin again after anti-money laundering failures.

The regulator told the digital bank to sharpen up its anti-money laundering (AML) capabilities and that it would need to play host to a special representative from BaFin to keep an even closer eye on the challenger bank.

AltFi reached out to N26 for comment but it declined to provide one.