In 2024, Berlin-based Neobank finally wants to be in the black. To achieve this ambitious goal, costs must be reduced. Therefore, the fintech company of Austrian founders Maximilian Tayenthal and Valentin Stalf announced today that about 70 employees would have to leave, corresponding to about 4% of the workforce.
More than 1,600 employees:s continue to work for N26. “The last year has brought significant and long-lasting changes in the global business environment,” it said in a statement, which is why the reduction in the workforce has become necessary.
The affected 71 employees:s will receive “comprehensive severance packages,” it adds. So far, N26 has not had to let any employees go. At the same time, many other European fintechs – including Klarna, Bitpanda, and Trade Republic – have laid off hundreds of employees in the past year. The turnaround in interest rates, a global economic crisis, and, in some areas of the fintech industry, the crypto crashes of last year – have changed the signs. The funding situation has turned around, and fundraising has become more difficult.
With a 4% reduction in the workforce, however, N26 is at the lower end of the scale – some other tech companies even let go of 30% or more of their employees.
It was also recently revealed that one of N26‘s big investors, Allianz X, had sharply devalued its stake in Neobank by more than half. N26‘s valuation in its last funding round was around €8 billion when it raised a whopping $900 million in its Series E in 2021. In the meantime, N26 was said to be getting ready for an IPO, while Bafin put a growth brake on the company for compliance reasons.
If N26 now wants to venture into an IPO in 2024, then black figures will undoubtedly be helpful in getting a reasonable valuation. N26 is not alone in devaluing the company. Klarna suffered a massive down-round last year, as did many other tech companies. Recently, it was also revealed that N26‘s biggest competitor, the British neobank Revolut, was also affected. Thus, shares of Revolut, an investment fund managed by Schroders Plc, were devalued by 46 per cent. Previously, TriplePoint Venture Growth BDC Corp downgraded Revolut shares by about 15 per cent. This would mean that Revolut would no longer be worth $33 billion but only between $18 billion and $28 billion.
