It became clear in the summer that things were not going well at N26 in Brazil – now the fintech is closing its branch. It is not the first time that N26 has failed outside Europe.
Problems were already apparent in the summer, but it is now clear: N26 Brazil is history. Getty Images / Rebeca Mello, andDraw, Thomas Trutschel
It seems as if the project was ill-fated from the start – now it is clear: N26 is withdrawing from Brazil. This means that the neobank has failed outside of Europe for the time being. In 2021, N26 had to withdraw from the USA after two unsuccessful years. The company itself states that the decision follows “N26’s strategy of concentrating on its European core markets.” The company wants to strengthen its market position in Europe.
It became clear in the summer that things were not going as planned at N26 Brazil. In August, the company laid off around 20 employees, which corresponded to around 15 percent of the entire Brazilian workforce – Gründerszene reported. The 80 remaining Brazilian employees have also now lost their jobs – but according to the company they can now apply for open positions in the European offices.
Read too
Bafin allows N26 more new customers – but only 10,000 per month
No money from headquarters
In addition, N26 Brazil obviously faced financial problems shortly after its launch. Because unlike usual, the Latin American subsidiary no longer received any money from the Berlin headquarters. According to information from the start-up scene, the company had been looking for (local) investors since May. N26 Brazil wanted to collect a total of 15 million US dollars. It was communicated that N26 Brazil wanted to remain independent of the parent company from Germany and develop its own products specifically for the Brazilian market.
N26 also started in Brazil significantly later than originally planned. The headquarters had already announced in 2019 that it would expand to Brazil. A product test was not started until 2021: “We made a test version of the local product available to interested consumers who had registered for it on a waiting list,” writes a spokeswoman for the company. However, the product has never been freely available in Brazil until recently.
Accounts are closed
Brazil is not a bad market for neobanks: Digital payments are widespread in the country, the pandemic gave this development additional momentum. However, there are a lot of competitors for N26 in Brazil, especially the top dog and fintech giant Nubank. In recent years he has had enough time to reach the remarkable number of users in Brazil of 80 million – almost as many as Germany’s population.
According to information from Gründerszene, N26 Brazil recently had around 250,000 customers in Brazil. The company says it will close existing accounts there within the next two months.
Read too
Full focus on profit: “I didn’t want to have my back against the wall anymore”