German digital bank N26 plans to be ready for IPO by end of 2022

German digital bank N26 plans to be ready for IPO by end of 2022

BARCELONA — German banking start-up N26 will be ready for an preliminary public providing by the end of 2022, co-CEO Maximilian Tayenthal advised CNBC.

“By the end of the year, N26 will be structurally IPO-ready,” Tayenthal stated in an interview Monday on the sidelines of the Cellular World Congress expertise convention.

Primarily based out of Berlin, N26 provides fee-free checking accounts by an app, competing with established lenders as well as to rival fintech companies corresponding to Revolut.

Tayenthal based the corporate in 2013 with longtime good friend Valentin Stalf, and the 2 have since grown it right into a $9 billion enterprise.

N26 lately raised $900 million in recent funding to assist it department out past retail banking into new areas like crypto and inventory buying and selling. It counts the likes of Coatue and billionaire PayPal co-founder Peter Thiel as buyers.

N26’s inventory market debut may happen as early as 2024, Tayenthal stated. Nonetheless, he added the agency is in no rush to record.

“We are not stressed to enter the public markets anytime soon,” N26’s boss stated. “The private markets have proven to be incredibly liquid.”

‘Liquidity-generating machine’

International inventory markets have seen seismic wobbles in current months as merchants navigate a plethora of uncertainties from the prospect of increased rates of interest to the Ukraine-Russia battle.

Volatility out there has spooked some firms into delaying or scrapping altogether any preparations to go public. In January, Dutch file-sharing service WeTransfer canceled its IPO plans due to “volatile market conditions.”

N26 is evaluating its path toward becoming a publicly-listed company at a time when traders are getting worried about the potential for higher interest rates from the U.S. Federal Reserve and other major central banks.

Higher rates are viewed as bad news for high-growth tech companies that tend to rely on debt financing to fuel rapid expansion.

However, Tayenthal said N26 is not put off by the prospect of rate hikes. The start-up is a licensed bank, and in 2020 had around 4.3 billion euros ($4.8 billion) sitting on its steadiness sheet.

“We are one of the companies that actually have a hedge on rising interest rates,” Tayenthal stated. “N26 is a liquidity-generating machine.”

If charges have been to rise dramatically, N26 would not want to elevate cash by an IPO because the enterprise would turn into “self-sustaining,” the corporate’s chief added.

Banks usually profit from rising rates of interest, since they’ll generate the next yield on money deposits.

Nonetheless, N26 stays unprofitable. The group reported a web loss of 150.7 million euros in 2020 — although this was down 30.5% from the earlier 12 months.

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