A group of investors in German neobank N26 are pushing for founders and co-CEOs Valentin Stalf and Maximilian Tayenthal to be ousted, according to reports.
Since launching in 2013, N26 has raised over $1.8bn and accrued more than 5m customers across 24 European countries. But the company has faced regulatory sanctions in the past over shortcomings in its anti-money laundering controls.
N26 has had multiple run-ins with German financial watchdog BaFin, resulting in multi-million euro fines and limits on the number of customers it can onboard.
Earlier this year, the regulator raised concerns over N26’s Netherlands-based mortgage subsidiary Neo Hypotheken, prompting some investors to demand a change in leadership, according to business publication Manager Magazin.
A source told Sifted investors are “unhappy” over N26’s recent brush with BaFin.
N26 declined to comment on the specifics of its “confidential” exchanges with the regulators. “We can share that N26, as a fully regulated financial institution, is in regular contact with BaFin on a variety of topics. Routine audits are a part of this, and are standard practice for all banks.”
It also said it “can confirm that claims suggesting the founders are under pressure from investors to step down are unsubstantiated."
BaFin has sanctioned N26 multiple times in recent years. In September 2021, the regulator fined N26 €4.25m for failing to install effective money-laundering controls and capped its customer acquisition numbers to 50k a month.
After the cap was lifted in 2024, N26 has since been reorientating the business toward growth, and achieved its first profitable quarter in Q3 last year.
But not all investors are happy with N26’s growth rate, nor its handling of compliance. Sifted understands tensions between this particular group of investors that backed N26 at its last fundraising round, a $900m Series E, and the founders have been ongoing for years, and this isn’t the first time they have put pressure on the board to remove the co-CEOs.
According to Manager Magazin, N26’s founders, who each hold a roughly 10% stake in the company, and its investors have drawn up a new version of a shareholder agreement. It states the investors would waive part of the interest they promised the company at its last financing round; in exchange the founders would have to step down from the operational business.
Earlier this year, Bloomberg reported N26 was seeking fresh funding at a reduced valuation to allow some of its existing investors — Coatue Management, Third Point and Dragoneer — to partially exit. Sifted understands these discussions are ongoing.
N26 says it is “in regular exchange” with current and prospective investors and it has “no immediate need to raise additional capital” having broken even last year.
