Report: Allianz Selling Share of N26 at Sharp Discount

Insurance group Allianz is reportedly selling its stake in neobank N26 at a steep discount.

According to a report late Tuesday (April 18) by the Financial Times, sources say Allianz’s venture capital operation Allianz X has told advisors to sell the company’s roughly 5% stake in N26 at a $3 billion valuation. Both firms are based in Germany.

The $3 billion figure is a third of the $9 billion N26 was valued at during its last funding round in fall of 2021. As PYMNTS has reported, Allianz — along with China’s Tencent — first invested in N26 in 2018 as part of a $160 million Series C.

An Allianz spokesperson told PYMNTS Wednesday (April 19) he couldn’t comment on individual transactions, but said the company was “constantly negotiating deals, talking to companies, and considering offers. Undertaking discussions does not necessarily mean acting on or consummating these discussions.”

Meanwhile, N26 released a statement to PYMNTS saying it was not aware of any “ongoing secondary sales” from investors, including Allianz X.

“We do not comment on any internal policies our shareholders may have when valuing companies in their portfolio,” the statement said.

The FT report notes that Allianz X chief executive Nazim Cetin last year raised concerns about N26, telling German newspaper Handelsblatt that the “growing pains are not great.”

And as PYMNTS wrote in February, very few neobanks have achieved the “holy grail of profitability” in spite of often insisting on their plans to hit that landmark. N26 is among those companies, remaining unprofitable almost a decade after its founding.

As recently as October of last year, CFO Jan Kemper wasn't able to pinpoint precisely when the company might reach a break-even point, saying only that N26 had enough money in the bank to break even without needing to raise more.

“We are not committing ourselves [to say] if this will take 12 months, 24 months or 36 months,” Kemper told reporters at the time, per a report by PYMNTS.

PYMNTS also wrote recently that the push by FinTechs to reach profitability has gotten a mixed reaction from some venture capital investors.

For example, Rob Moffat, partner at U.K. VC firm Balderton Capital, said in an interview with PYMNTS that focusing solely on profitability is not enough to grow “great technology and software businesses.”

In fact, he said that while some companies can quickly reach profitability after launch, others, including loss-making businesses, can hit that milestone with time and should not be ignored if crucial metrics like gross margins and client retention demonstrate strong performance.

If these boxes are checked and “we’re very confident that you have all of those pieces that can [help you] grow to profitability,” Moffat said Balderton will consider backing such firms.