German digital bank N26 will be withdrawing its service from the U.S. early next year. The Berlin-based fintech’s app will no longer be able to be used by American customers from January 11, 2022. The firm said that it was shifting its focus to Europe. The company’s press release also stated that U.S. customers would be given further instructions on how they could withdraw their funds, smoothy.
Kirk Gunning is CEO and co-founder of Fourthline a startup that helps firms like N26 tackle fraud. Gunning told CNBC that the fintech firm wanted to concentrate on Europe, which was a “smart move.”
The shutting down of U.S. operations reaffirms the notion that European fintechs do not do well in America. N26 began expanding its operations in 2019 but did not have a smooth ride. It had to let go off 10 percent of its workforce based in New York due to the coronavirus pandemic. This was followed by a high profile exit of its head of U.S. Operations—Nicolas Kopp. The bank said that it would try to move U.S. staff to its other business areas “wherever possible.”
N26 is facing a lot of pressure back home. In June, it had to pay a fine of $5 million by German regulators as it failed to submit timely reports on suspicious activities on money laundering. It also reached an agreement with BaFin, a watchdog, to restrict the number of new customers it will add to its site, each month.
N26 has been valued at $9 billion in a recent funding round. In October, it had reported that it had received a cash injection of $900 million from investors. Some of its investors include Coatue, an investment manager based in the U.S., GIC, a sovereign wealth fund based in Singapore, Peter Thiel, a tech billionaire and more.