N26 GmbH today announced that it has closed one of the biggest funding rounds raised by a financial technology startup in recent memory: a $900 million investment led by Third Point Ventures and Coatue.

The round more than doubles the Berlin-based startup’s valuation to over $9 billion. N26 will use the capital to hire 1,000 more employees who will help build new features for its namesake service, a digital banking platform that users can access via a mobile app.

N26’s app is available in more than two dozen markets worldwide. When signing up, consumers receive a bank account and a virtual payment card they can use to make purchases online, as well as in stores if they connect to a digital wallet app such as Apple Pay.

N26 built a collection of personal finance features to set its platform apart from the numerous other companies competing in the digital banking market. The startup’s app uses artificial intelligence to organize  users’ expenses by category, which it says makes it easier to track spending and saves time. Another feature, Spaces, enables users to create up to 10 savings sub-accounts.

N26 has branched out into several new areas since launching in 2013. The startup offers electronics insurance and business bank accounts that provide additional features not available with the standard edition of the app, including a 0.1% cash-back on all purchases. Now that it has an additional $900 million to invest in growth, the startup can likely be expected to add yet more financial services to its portfolio.

Another reason N26 may seek to expand its feature set is the fact that rival Revolut Ltd. announced plans to roll out new products after closing a $800 million funding round of its own earlier this year. The round valued Revolut at $33 billion. Offering a broad selection of financial services to customers not only helps digital banking providers set their platforms apart from the competition, but also creates new revenue streams. 

N26 disclosed today that 70% of its revenue currently comes from payment fees and user subscriptions. The remaining 30% is accounted for by N26’s “Banking & Other” segment, the startup stated. It didn’t share absolute numbers, but divulged that revenue is growing at a rate of 60% year-over-year. Transaction volume is increasing quickly as well: The total value of transactions that users make annually via N26’s platform is on track to exceed $90 billion this year. 

“This recent financing round solidifies the fact that retail banking as we know it has changed,” said N26 co-founder and Chief Executive Officer Valentin Stalf. “With our fresh capital, we are in pole position to become one of the biggest retail banks in Europe, all without a single branch.”

According to CNBC, N26 expects to be ready for an initial public offering within 12 to 18 months. This means that the startup’s latest $900 million round could be its last round of private funding before listing on a stock exchange. 

Besides led investors Third Point Ventures and Coatue, the newly announced funding round also saw the participation of Dragoneer Investment Group, as well as existing backers. N26 has raised $1.7 billion to date. 

Image: N26