Neobank N26 Anticipates Breaking Even in Face of Losses

German neobank N26 said it has enough cash until it breaks even, although its finance chief is not ready to say when that will happen.

According to multiple media reports Tuesday (Oct. 11), the company reported a 14% increase in net losses for 2021, the same year N26 raised $900 million at a $9 billion valuation.

“We’ve bought a lot of freedom with this funding round,” CFO Jan Kemper said Tuesday, adding that the company wants to get to break even without needing to raise more funds.

Kemper added that the company is “agnostic” over how long this will take, noting that there were factors outside its control.

“We are not committing ourselves if this will take 12 months, 24 months or 36 months,” Kemper told reporters.

Learn more: Digital Bank N26 Ready by Year’s End for IPO

Kemper also walked back the bank’s previous plans to go public by year’s end, saying it could take several months for the company to have all the pieces in place for an initial public offering.

The neobank’s 2021 losses rose to $167.10 million, from a 151 million euro loss for 2020. It added one million new customers last year, compared to the two million customers it brought onboard during in the previous year.

According to a company news release, N26’s gross revenue grew by 50.3% year-over-year, while transaction volume increased 59%.

“On average, customers log in to their N26 app three times a week, making us the mobile bank with the most active customer base in Europe,” said Valentin Stalf, N26’s co-founder and CEO.

Read more: N26 Fined Almost $5M for AML Deficiencies

However, N26’s customer growth has slowed following a growth cap decreed last year by BaFin, Germany’s financial regulator.

The watchdog fined N26 nearly $5 million in 2021 and ordered the bank to limit new customers to 50,000 to 70,000 per month until it updated its anti-money laundering measures.

Stalf reportedly said Tuesday the bank has made progress on that front, complying with the bulk of BaFin’s requests. He added the bank is confident the restrictions will be listed within a year, if not sooner.