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Ten years after pitching on stage at TechCrunch Disrupt in London, fintech N26 has reported its first ever quarterly (pre-tax) profit. The challenger bank with millions of customers across Europe generated a net operating income of €2.8 million during the third quarter of 2024 (or $2.9 million at current exchange rates).
This is an important milestone for the startup but also significant news for the fintech industry. Challenger banks like Monzo, N26, Revolut and Starling used to be some of the most hyped startups in Europe. They raised billions in funding, expanded aggressively, and overspent to reach that next funding round.
Now, it’s time to sit down and do the math. Large funding rounds are harder to obtain and investors now often require a clear path to profitability.
Revolut is extremely profitable — $428 million in net profits for 2023 alone — while Monzo just crossed the line with a pre-tax profit of £15.4 million for 2023 ($19.4 million). N26 is following suit.
For several years, Germany’s financial regulator BaFin imposed a cap on new signups as a sanction to force the startup to improve its anti-money laundering processes. But it lifted the cap earlier this year and that has had a significant impact on the company’s bottom line.
According to N26, more than 200,000 people currently open an account with it every month. Interestingly, N26 stopped sharing the total number of users it has. Instead, the company focuses on its 4.8 million “revenue-relevant” customers.
The influx of new users has led to a 40% revenue increase for the fintech in 2024 compared to 2023. And N26 is on track to generate €440 million in annual revenue this year.
As a reminder, in addition to free accounts, N26 offers paid subscriptions with access to more financial services and features. The company also offers savings accounts, stock, and crypto trading as well as credit products.
Now, let’s see if N26 manages to stay in the black as 50% of its 2024 revenue comes from interest revenues from customer deposits and the company’s retail lending activities. With interest rates going down in Europe, that source of revenue will also be more difficult to maintain at a high level.
Romain Dillet is a Senior Reporter at TechCrunch. He has written over 3,000 articles on technology and tech startups and has established himself as an influential voice on the European tech scene. He has a deep background in startups, privacy, security, fintech, blockchain, mobile, social and media. With twelve years of experience at TechCrunch, he’s one of the familiar faces of the tech publication that obsessively covers Silicon Valley and the tech industry. In fact, his career started at TechCrunch when he was 21. Based in Paris, many people in the tech ecosystem consider him as the most knowledgeable tech journalist in town. Romain likes to spot important startups before anyone else. He was the first person to cover N26, Revolut and DigitalOcean. He has written scoops on large acquisitions from Apple, Microsoft and Snap. When he’s not writing, Romain is also a developer — he understands how the tech behind the tech works. He also has a deep historical knowledge of the computer industry for the past 50 years. He knows how to connect the dots between innovations and the effect on the fabric of our society. Romain graduated from Emlyon Business School, a leading French business school specialized in entrepreneurship. He has helped several non-profit organizations, such as StartHer, an organization that promotes education and empowerment of women in technology, and Techfugees, an organization that empowers displaced people with technology.
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