German digital bank N26 is shutting down its U.S. operations, less than two-and-a-half years after it launched in the country.
N26′s 500,000 American customers will no longer be able to use its app from Jan. 11, 2022, the company said in a statement Thursday.
The Berlin-based fintech, which was valued at $9 billion in a recent funding round, said it wanted to shift focus to its core European business.
“U.S. customers will be able to use their accounts as usual until January 11, 2022, and will receive further instructions on how to withdraw their funds to ensure a smooth transition,” the bank said.
It’s not the first time N26 has pulled its services from a major English-speaking market. The firm withdrew from the U.K. early last year, blaming the country’s exit from the European Union. N26 had reportedly been struggling to gain U.K. users.
The news is a reminder of how difficult it has been for European fintechs to expand their services in the U.S.
British digital bank Monzo, which started testing its service in U.S. in 2019, recently withdrew its application for a U.S. banking license.
On the flip side, American online brokerage Robinhood tried and failed to launch internationally, scrapping plans to roll out a U.K. version of its app last year.
As well as refocusing its attention on Europe, N26 said it will also ramp up spending on new features like investment products in the coming year. It’s also planning to expand into Eastern Europe amid growing demand in the region.
The company said it will aim to move U.S. staff to other areas of its business “where possible.”
N26′s U.S. expansion, which began in July 2019, has faced a number of setbacks. For one, the firm laid off 10% of its New York-based workforce last year, citing challenges resulting from the coronavirus pandemic. Nicolas Kopp, the head of its U.S. operations, subsequently quit the bank.
N26 is also facing regulatory pressure in its home market. German regulators fined the bank $5 million in June for failing to submit suspicious activity reports on money laundering on time.
And last month, as N26 announced a new $900 million cash injection from investors, the company said it had reached an agreement with the watchdog BaFin to limit how many customers it onboards each month.
N26 has raised a total of $1.7 billion in funding to date. The company counts the likes of U.S. investment manager Coatue, Singapore sovereign wealth fund GIC and tech billionaire Peter Thiel as investors.