According to N26, it no longer has a licence to operate in the UK after Brexit. It said it will close all accounts on April 15. The neobank has also asked its customers to transfer its assets to alternate accounts.

In a statement, N26 said, “With the UK having left the EU at the end of January, we will in due course no longer be able to operate in the UK with our European banking license. Therefore, we are writing to share the news that we will be leaving the UK and closing all accounts.”

Interestingly, N26 started its business in the UK just five months ago whereas Brexit negotiations were going on for over five years.

Thomas Grosse, chief banking officer at N26 told the media that the firm respects the political decision taken by the UK, and as a consequence, it will be unable to serve its customers in the UK and will have to leave the market.
According to media reports, N26 currently manages around 200,000 accounts in the UK.

Last month chief executive at N26, Valentin Stalf revealed that the firm manages around 5 million accounts globally. By the end of the first half of 2019, the Berlin-based neobank had 3.5 million accounts.

N26, which was last valued at $3.5 billion, launched its business in the US during the same period it entered the UK market. Reportedly, it had attracted around 250,000 users in the US, where it claims new customers are shifting funds from established giants like Chase Bank and Citibank.

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Launched in 2005, Zopa was the first peer-to-peer lending firm in the UK — lending nearly £4 billion to consumers since inception. It was also one of the world’s first to pioneer in peer-to-peer lending. 

Christopher Woolard, executive director of strategy and competition at the FCA, last year, said, “We believe that loan-based crowdfunding can play a valuable role in providing finance to small businesses and individuals, but it’s essential that regulation stays up to date as markets develop. The changes we’re proposing are about ensuring sustainable development of the market, and appropriate consumer protections.”

The lending platform applied for its banking licence in 2016. Since then, it has raised £60 million from new and existing investors in two funding rounds, according to a local media report. Its efforts to acquire a banking licence marked the beginning of its growth in retail banking. 

Zopa stands for Zone of possible agreement. It plans to offer savings accounts and credit cards among other banking products. For that reason, the company is expected to show a strong balance sheet, the local media reported. 

Competition among peer-to-peer lenders has increased in recent years. According to analysts, Zopa’s ambition to become a bank reflects that there is limited scope for growth in peer-to-peer lending market. Zopa’s decision to tap into the banking sector comes after a proposed tough regulation for the industry. The company’s bank board is led by Chairman Peter Herbert. 

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“It is a really great signifier of how far we’ve come since the last round,” Tristan Thomas, Monzo’s head of marketing, told CNBC.

She added that Monzo has doubled its customer base to more than two million during the same period.

The recent valuation cements Monzo’s place as one of the leading fintech startups across Europe, despite recording a loss of 33.1 million pounds last year.

The new round of funding for Monzo was led by US based startup accelerator Y Combinator that has also funded companies such as Airbnb and Stripe.

Other participants in the funding round are Latitude, General Catalyst, Stripe, Passion Capital, Thrive, Goodwater, Accel, and Orange Digital Ventures.

Even though the company has raised enough capital, Monzo will use this fund fight for market share in the US, according to CNBC. Monzo has already announced its plan to launch operations in major US cities such as Los Angeles.

Despite its recent valuation, the digital bank is yet to make profit. The biggest challenge for Monzo will now be to convince its customers to make it their preferred choice of bank and also start making profit.

Revolut, one of Monzo’s competitors with about 4.5 million was valued at £1.3bn at its last fundraising.

Launched in 2015, Monzo was initially offering prepaid debit cards manageable through a mobile app. Facilities such as cheap foreign exchange rate helped the startup garner over two million users over a short period of time. The company got its banking licence in 2017.

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