How is the buildout of the N26 New York team going?
We have a small team currently on the ground, as well as support from our headquarters in Berlin. However, the main people working on the U.S. operation are the ones based here in New York. There are still a few roles open that we are looking to fill in the next couple of months to round out our local team.
Can you provide an update on how N26 is progressing towards its launch in the U.S.?
I moved to New York last September and immediately started to build the team. We invested a tremendous amount of time early on figuring out the regulatory backbone of the U.S. product. While we have our own bank license in Europe, we’ll be launching together with a partner bank in the U.S. to start. This was the same approach that we took in Europe in 2015 when launching our initial product there.
And how is the product coming along? Can Americans expect the same product as the one in Europe?
Over the first couple of months, we conducted extensive market research and user interviews to learn how people spend differently here in the U.S., and how people bank differently as compared to our European customers. This helps us determine which key features to include, as well as which U.S.-specific services we should consider.
For instance, Americans are very focused on the rewards they earn with their credit cards. Obviously, people in Europe also care about how much they pay for banking services and whether they get something out of it. However, based on our research and my personal experiences here in the U.S., people are especially aware of what they earn on their purchases. So the rewards scheme is very important. Is it triple points for each dollar you spend? Is it double? Is it one-to-one? That’s where we need to tailor our product.
In terms of similarities, I’d say what makes our European product so successful is that it addresses certain universal themes very well. Transparency is one. In Europe, people are very concerned about transparency around fees, but it’s the same here. So I think that’s one area that will translate very nicely between Europe and the U.S.
N26 recently announced that it raised $160 million in its Series C funding round. How does this impact the U.S. launch?
We’re all very excited to have Allianz X and Tencent join our group of investors. Not only are they both leaders in their respective fields, but their combined expertise in banking and internet services really aligns with our mission to build a simpler, mobile-first banking solution for users. Personally, I think their support also reflects the market’s confirmation that digital banking is the future. The funding itself will be used toward product development and international expansion, including our U.S. efforts.
German Accelerator is an accelerator program for German companies who want to launch in the U.S. Usually we bring in earlier stage companies than N26, so why did you want to partner with us, and how has the partnership been going so far?
It’s true that we are a large company back in Europe. We have over 400 employees that cover 17 markets. Here in the U.S., however, we are structured very much like an early-stage company. We’re a small team in a room solving problems every day, trying to bring a great product to the U.S. market as soon as possible.
Because we operate like a startup in the U.S., it was helpful for us to get connected to German Accelerator’s network and learn new ways of approaching the U.S. market. Access to the right people is crucial when you are launching in a new market. The German Accelerator events have been invaluable in bringing together key groups of people from the startup world, such as investors, journalists, thought leaders, and other entrepreneurs. It’s been a positive experience to be able to present N26 at pitch nights and attend industry events.
Also, the efficiency with which German Accelerator operates in terms of onboarding and application process is phenomenal. And of course, having access to a mentor like you, Samer, has been rewarding to me personally. Your insights as a serial entrepreneur who’s launched several successful businesses in the U.S. have been very beneficial.
Has anything surprised you since you began development here?
Navigating the complex regulatory terrain in the U.S. has been challenging at times, but this is something the banking industry as a whole has to manage. The other interesting part that we’re trying to work through internally is the transition from a small company with fewer than 40 people when I first joined, to now almost 400 employees. We’re learning how to find a balance between our rapid growth and the need for more organizational structure, and maintaining the culture of innovation and experimentation that got us to where we are today. Having offices in different international time zones also presents some new challenges. All in all, these are good problems to have.
What advice can you give to other European or global startups looking to grow in the U.S.?
Access to the right people is crucial if you’re launching in a new market. Working with an accelerator is one good way to get connected. Being on the ground is crucial because it’s so much easier to interact with different stakeholders and drive projects forward with local partners. Also, it’s important to capitalize on the fact that you are a small team. Be nimble, move fast and try to apply what you’ve learned from previous challenges at headquarters that might be relevant here.