German neobank N26 is to discontinue its US operations to “sharpen its focus” on its European business, with the intention to launch additional financial products and services in the region.
The digital bank will cease operating in the US on 11 January next year, having entered the market in 2019.
Chief growth officer at N26, Alex Weber, wrote in a blog post that “stepping out of a market is extremely difficult” and added it was “disappointing”.
N26 confirmed that customers in the US will be able to use their accounts as usual until 11 January 2022, and can expect to receive further instructions on how to withdraw their funds.
Weber wrote: “Two years in, we have taken an honest look at where we are today, what the challenges and opportunities are in front of us as a business and what our focus should be for the years ahead.
“While we recognise and celebrate the progress we have made since launching in the US market, where we have welcomed more than 500,000 customers, we know we would need to invest significantly more resources, and capacity of our central teams in order to achieve our ambitious goals for the market.
“On the flipside, the pandemic has accelerated the adoption of digital banking globally, but in particular in Europe, at unprecedented rates. That is why – as painful as it is – we are deprioritising the US in order to sharpen our strategic focus on the important role we have to play as a pioneer in digital banking in Europe.”
N26 said it would support US employees “in exploring roles supporting its global business where possible as it looks to the future”.
The Berlin-based neobank plans to expand into new verticals, including investment products, in the coming year and is also “assessing” future expansion into additional markets in Eastern Europe.
N26 will also continue to build on its footprint in existing core European markets, primarily Germany, France, Italy and Spain.
In his blog post, Weber added: “In addition, and independent from our central teams, we have established an autonomous business in Brazil that, powered by its own local license, is currently testing a local product and will look to bring the second era of fintechs to the market in 2022.”