More than three years after first attempting to enter the Latin American market and only seven months after finally rolling out its app in Brazil, German digital bank N26 announced on Tuesday that it is shutting down its operation in the country as of December 7.
“N26 has decided to close operations in Brazil as part of the company’s strategy to focus on key European markets,” the company stated on its website and social media.
With nearly 9 million customers across 24 national markets, the neobank reworked its strategy for the country more than once, unable to face local well-established players, such as Nubank and Inter, or global competitors, such as Revolut, which landed in Brazil last May.
The original idea was to launch by mid-2020, but even before the pandemic hit, the fintech realized that it needed a different strategy to compete with local players. This strategy was only revealed in 2021, when the fintech started positioning itself as a “fincare company,” that is, a bank dedicated to helping Brazilians take care of their financial life.
The bank offered a digital account with basic unlimited services, such as payments, in addition to debit and credit cards, but also provided educational tools, such as ‘spaces’ — sub-accounts where users could separate their money according to different purposes, such as paying bills or traveling.
In January 2022, N26 tested the fincare concept with 2,000 customers — and roughly 200,000 people on its waiting list. In May last year, the list had more than 500,000 people, and N26 was enabling up to 3,000 customers a day, the fintech’s chief executive Eduardo Prota told The Brazilian Report at the time.
By then, the Brazilian operation was already quietly looking for investors other than its German parent company — N26 had set up its operations in Brazil as a legally separate entity, so it could add new, different partners.
Founded in 2013 by Valentin Stalf and Maximilian Tayenthal, N26 started operating in Europe in 2015 and presents itself as the world’s first digital bank. Since then, it has raised nearly USD 2 billion in funding rounds, aiming to reach the milestone of 100 million customers worldwide. In 2021, N26 had also pulled out of the United Kingdom and the U.S., so it is unclear if the worldwide goal remains.
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