German digital bank N26, at one point Europe's most valuable fintech startup, said it is discontinuing its operations in the U.S. early next year

"N26, which launched in the U.S. in August 2019, said it would focus on expanding into new business lines, such as investment products, in the coming year. N26 also said it is eyeing other markets in Eastern Europe and cited growing customer demand there.

N26 leaving the U.S. market signals a change from the company's earlier ambitions. In January 2019, Valentin Stalf, the company's co-founder and chief executive officer, said N26 had "a huge shot to be the leading mobile bank in the U.S." He said at the time that the company could sign up one million American customers in one to two years.

Those growth prospects haven't panned out. A spokeswoman for N26 on Thursday said the company has 500,000 customers in the U.S.

N26 is pivoting away from the U.S. as its growth in Europe is being capped. It said last month that German financial regulator BaFin ordered it to temporarily limit new European customers to 70,000 a month. Regulators have found issues with the digital bank's internal controls, which banks need to maintain to prevent illegal activity. The regulatory action that N26 disclosed in October was the third in six months to improve the bank's controls.

N26, which is based in Berlin, said U.S. customers can use their accounts as usual until Jan. 11. They will be given further instructions on withdrawing their money. The bank said it "intends to support U.S. employees in exploring roles supporting its global business where possible."

N26 is currently valued at over $9 billion, it said. Among its earlier investors was Peter Thiel's Valar Ventures. Tencent Holdings Ltd., the Chinese internet company, has also invested in the digital bank.

N26 was founded in 2013. It launched its first product two years later." [1]

1. German Digital Bank to Quit U.S.
Prang, Allison.  Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 19 Nov 2021: B.5.