German online banking startup N26 will open a subsidiary in Brazil next week, marking its first move to enter Latin America, the company’s head for Brazil said on Wednesday.
Eduardo Prota said N26, which raised $300 million in January in a new funding round that valued it at $2.7 billion, also seeks to form a partnership with a local bank to offer a suite of mobile banking services.
N26 has yet to decide whether to operate in Brazil as a bank, and has not applied for a Brazilian banking license, Prota added. In Europe it started operating through partnerships and eventually rolled out some independent online banks.
The arrival of N26, which has 2.5 million clients in 24 European countries, underscores how fintechs are ramping up competition with traditional branch-based banks in Brazil, where 30 percent of the population lacks any kind of bank account, according to the World Bank.
N26 will compete in Brazil with digital banks such as Nu Pagamentos SA, which has more than 2.5 million digital accounts, Banco Inter, and C6Bank, which started operations in January.
N26’s investors include New York-based Insight Venture Partners, Singapore investment vehicle GIC, China’s Tencent Holdings, the digital investment arm of insurer Allianz, and Silicon Valley investor Peter Thiel.