N26 Launches Stock and ETF Trading in Austria
Berlin-based banking startup N26 is rolling out a new stock and ETF trading feature, starting with Austria as the first market. This launch marks a renewed focus on the startup’s core markets and aims to offer a larger portfolio of banking products in these countries.
N26’s Evolution into a Full-Service Bank
When N26 started, it offered a simple banking product: an account for sending and receiving money and a real-time card management system via a mobile app. This simplicity was a key factor in attracting millions of customers, as the service worked much better than traditional banking apps.
As the company expanded into more markets, it began adding new features. Now, N26 has shifted its focus to efficiency and profitability, cutting back its international expansion to focus exclusively on Europe, particularly Germany, France, Spain, and Italy.
A Shift in Strategy: Focus on Europe
N26 had previously opened offices in the U.S. and Brazil but has since reversed its course, choosing to consolidate its efforts in its core European markets. Additionally, N26 has been working closely with Germany's financial regulator BaFin, which has imposed restrictions on the number of new clients the company can onboard.
"I hope that we’ll be getting out of any kind of restrictions in the next couple of quarters, but it’s very hard to predict," said N26 co-founder and CEO, Valentin Stalf.
Stock and ETF Trading: N26’s New Feature
One of N26’s newest features is the addition of stock and ETF trading, aimed at increasing the average revenue per user. Starting in Austria, users can now transfer money from their main N26 account to a new trading space. This allows them to buy fractional shares of stocks or ETFs for as little as €1.
The company has partnered with Upvest to provide this service. N26 charges €0.90 per trade, with premium users receiving free trades depending on their subscription plan. The goal is to boost premium subscriptions and further monetize its user base.
Stock trading will initially be limited to ETFs, with stocks coming later. While the rollout will start in Austria, N26 plans to expand to Germany and other European markets soon.
A Slow Rollout with Big Ambitions
N26’s launch of stock trading is just one piece of a larger strategy. Recently, the company rolled out savings accounts in Spain and Germany, offering an interest rate of 2.6%. The company also offers loans up to €25,000 and even crypto trading in some markets. N26 is becoming a full-service bank, with everything bundled in one app.
This new feature positions N26 to compete with apps like Trade Republic, which also offers stock trading. But N26’s edge is the integration of multiple services into a single app.
N26’s Financial Performance
Despite the addition of new features and an increase in revenue, N26 still reported a €100 million loss in 2023. This was a significant improvement over the €213 million loss in 2022. However, the company remains focused on improving its margins and getting closer to profitability.
"By the end of last year, we were almost already break-even on a monthly basis," said Stalf. "So we continue this now. During the second half of the year, I think we’ll be profitable on a monthly basis as a full company."
With over 8 million customers and €8 billion in assets under management, N26 continues to expand its services and improve its offerings. As it builds out its banking portfolio, we can expect even more features to be added in the near future.