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Podcast

The Challenges for Challenger Bank N26

Valentin Stalf, co-founder of N26, about the next steps for the digital bank and why he pulled the plug in the Uk

Many entrepreneurs know the pressure to grow a business super-rapidly while competing for financing and dealing with regulation all at the same time – whether you infrastructure and processes are built for it or not.

In the Bits & Pretzels Podcast N26' CEO and co-founder Valentin Stalf shares his thoughts about the challenger banks' growth strategy and what other entrepreneurs can learn from the digital service's march to the top of the fintech world. He's convinced for example that "If you don’t take opportunities you’ll never grow".

Rapid expansion has always been a key driver for the Berlin-based bank and so far its strategy was successful. N26 really worries traditional banks throughout Europe an its valuation of 3.5 billion dollars makes it the most valuable startup in Germany and top 3 in Europe and top 10 worldwide.

At the same time N26 hit some roadblocks as well. It pulled the plug just after 18 months into the UK blaming the country's decision to leave the European Union. So did Brexit demand its first startup victim?

Fintech experts including Sarah Kocianski, head of research at fintech consultancy 11:FS, suggest that the bank had simply pulled out after struggling to gain momentum in the UK because of tough competition by rivals, including startups such as Revolut and Monzo. Moreover, data compiled by Sifted in December suggested N26 was struggling to catch up in the UK, after expanding out of Germany.

N26 gained more than 5 million customers in total, but it didn't break down the numbers in the UK since its last investment rounds in July where it said it reaches now 200 000 customers with adding 1 000 new customers a day.

Valentin insists in the Bits & Pretzels Podcast that "definitely Brexit is the reason why we withdrew from the UK" and that he would have "loved to stay in the UK". He points out: "As a European bank with a European banking licence, we would need to undertake complex regulatory measures and product updates in order to continue operating in the UK." N26 continues to be able to operate throughout the European Union on its German licence.

The CEO of the Berlin-based bank also shares how N26 manages the growth of its company internally since the team more than doubled over the last 12 months and what other founders could learn from his experience about how to work on you culture and structure:

"Sometimes teams grow so fast (…) you need to provide training for leaders that only six months ago had a team of two and now they have a team of twenty (…) helping  people to grow themselves that’s key in such as growth phase."

01:34: Why N26 stopped operating in the UK: Brexit, competition or an additional reason?
06:10: N26's strategy for growing in its core markets as well as into new markets
10:53: What the entering of big tech into payments means for the fintech world
13:05: How N26 is trying to solve product issues around customer complaints and bad ratings
13:36: Where the German startup ecosystem stands right now with funding, ideas and talent
15:42: The challenges of hyper-growth: Working on culture, structure and performance management
16:55: Valentin about changes in the N26 management and company development
22:57: Beer Garden break: What's in the office fridge of a German fintech unicorn
25:55: Valentin about his weekends, his hobbies and the beauty of rural Brandenburg
29:24: Valentin's toughest moment as a founder: pivoting the company and its product around
33:52: The special place: Throwback to when Valentin studied in Tokyo and experienced a new level of teamwork
35:54 Either-Or-Game: About an extraverted guy who listens to electro music and Berlin beats

Production: Regina Körner, Migo Fecke, Hubert Honold. Design: Christian Lohmeier.