N26 starts calling customers in the queue since 2019 – 03/26/2023 – Market

About four years after announcing the start of operations in Brazil, the fintech of German origin N26 finally began to invite people who registered in the queue to use the services of the digital platform.

With approximately 8 million customers in the 24 markets in which it operates and with a market valuation of approximately US$ 9 billion (R$ 47.2 billion), N26 brings the concept of “fincare” as a proposal to differentiate itself from the competition. , which means taking care of your user base’s finances.

CEO of N26 in Brazil, Eduardo Prota says that fintech started operations in the country with two main strands of services. One of them is the provision of free traditional banking services for everyday life, such as credit, debit, Pix and boleto cards. The other front of action is support for customers’ decision-making, which today has “spaces” as its main tool.

Prota explains that the “spaces” are subaccounts in which it is possible to separate the money deposited, depending on the different objectives of each one, such as paying the monthly bills, planning a trip or buying a car or a house.

The client can create up to 26 different sub-accounts, with the resources yielding 100% of the CDI regardless of the period in which they are held. In addition, for every R$100.00 spent with the credit card, the customer earns an additional 1% return on the CDI, with yields reaching up to 200% of the market reference index.

At the beginning of the year, N26 also started to offer a financial planning service, in which the client can schedule a 30-minute conversation with a Serafin consulting specialist to help organize accounts and investments.

“Fintechs and digital banks have helped a lot to improve access to banking products, but the service that helps you make the best decisions, knowing how to organize your month, doesn’t have much to do in the middle of the pyramid. the top of the pyramid, but for the middle of the pyramid there isn’t. So that was the place we decided to focus on”, says Prota.

“We are creating a second generation of fintechs, which try to build financial health, which is what we call fincare, with the ‘fin’ of finance and the ‘care’ of care in English”, adds the executive, who before occupying the current position was responsible for the operations of Cielo’s open platform.

According to the CEO of N26 Brasil, the queue of people interested in becoming a fintech client totals around 400,000 people.

He prefers not to reveal when exactly fintech started calling the first customers, only that it is a “very recent” process, which started in the middle of the second half of 2022, and which today are already a few hundred thousand users.

Prota says that the delay between the announcement of the start of operations in the country and the summoning of the first customers was due to changes in strategy that the company had to take.

Still at the end of 2019, fintech paused operations in the country, as it understood that the strategy of importing services and products from the headquarters in Europe would not work in the Brazilian market.

The assessment at that time was that it would be necessary to set up a business from scratch, with everything built locally, to be better adapted to the needs and demands of Brazilian customers, says the executive, adding that the pandemic also ended up postponing the resumption of plans .

“Despite taking two steps back in relation to launching ourselves in the market, we take 20 steps forward in terms of customization and speed. This was a very long-term bet, showing that we really want to be here”, says the CEO of N26 Brasil, whose name refers to the magic cube, with 26 blocks that need to be moved to be solved.

In early 2022, fintech took the first steps to officially launch operations in Brazil, with the creation of the “N26 Insiders” program. In it, a group of around 5,000 users was invited to start testing the platform, which would lead to the launch of the first services for a broader base of customers.

Prota also says that N26 had no exposure to SVB (Silicon Valley Bank), a financial institution focused on the startup ecosystem that went bankrupt in the United States in March, hit hard by the increase in interest rates by the Fed (Federal Reserve, US central bank) .

It recognizes, however, that the environment has become more challenging for new digital financial services companies, with the end of the era of abundant liquidity to finance projects that would become profitable only a few years ahead.

The executive claims that the N26 operation in Brazil is still not profitable, but that the plans are to make the business start to turn a profit in a “few years”, a strategy that involves the beginning of the granting of personal loans to customers at some point in the future.

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Timeline

2013 N26 is founded in Germany by the Austrians Valentin Stalf and Maximilian Tayenthal

2015 The first free accounts and fee-free cards are launched in Austria and Germany

2019 Announcement of the arrival of N26 to Brazil

2020 N26 Brasil obtains BC license to act as SCD (Direct Credit Society)

2021 N26 receives funding of US$ 900 million and is now valued at US$ 9 billion

2022 Start of release of the app for the queue in the 2nd semester