N26 fails again outside Europe: Brazil branch closes – another setback for the neobank

N26 fails again outside Europe: Brazil branch closes – another setback for the neobank

According to a report by www.businessinsider.de, it became clear in the summer that things weren't going well at N26 in Brazil. Now the fintech company has decided to close its branch in Brazil. This is not the first time that N26 has failed outside Europe. The company had to withdraw from the USA in 2021 after years of failure.

N26's decision to withdraw from Brazil has various reasons. On the one hand, N26 Brazil had to struggle with financial problems because the company no longer received money from its Berlin headquarters. According to information from Gründerszene, the company was looking for (local) investors to raise a total of $15 million. In addition, N26 launched in Brazil much later than originally planned and was unable to develop its own products specifically for the Brazilian market.

Brazil is generally a promising market for neobanks as digital payments are widespread there. However, there is high competition in Brazil, especially from fintech companies like Nubank, which already has an impressive user base of 80 million customers in Brazil. In comparison, N26 Brazil recently had only about 250,000 customers, and it has announced that all existing accounts will be closed within the next two months.

As a financial expert, it is clear to see that N26's withdrawal from Brazil is due to several factors: teething problems, lack of capital and strong competition. This withdrawal could have a significant impact on the market and the financial industry, particularly in terms of trust in new neobanks and the willingness of investors to support such companies.