UNIT 2 - FINTECH STARTUP ANALYSIS Part 2

Case Study: N26 (50 mins)

Practical Analytic Exercise

INVESTOR MEMO TASK

Scenario

You work for a venture capital fund in Frankfurt.

Your investment committee is considering an investment in N26.

You must prepare an investment recommendation.

Student Worksheet

Company Snapshot

• Founded: 2013
• HQ: Berlin
• Digital-only bank
• European neobank
• Full German banking licence
• 7M+ customers (2021)
• $900M+ Series E round
• $9B valuation (2021)
• Revenue increasingly driven by interest income and subscriptions

Group Task (2-3 students)

Evaluate N26 using:

1. Revenue Model

Strong or weak? Why?

2. TAM/SAM/SOM

How large is the realistic opportunity?

3. Scalability

Can this business scale profitably?

4. Funding + Valuation

Fairly valued or overvalued?

5. Moat

What protects them from competitors like Revolut?

6. Exit Potential

IPO, acquisition, or neither?

7. Regulatory Risk

What is the biggest compliance threat?

Final Decision

Would you invest?

Choose:

• Strong Buy
• Buy
• Hold
• Avoid

Students must justify with evidence.

Investment Committee Presentation

Each group gives:

3-minute investor pitch

Structure:

• Our recommendation is…
• The strongest investment argument is…
• The biggest red flag is…
• Our valuation concern is…
• Our final decision is…

Other groups can challenge them like real investors.

Example:

“Why do you believe profitability is achievable?”

“Why is IPO more likely than acquisition?”

Reflection Questions

• Which metric matters most in fintech?
• Is growth more important than profitability?
• Would you personally invest?

Extension Activity

Compare:

N26 vs Revolut

in terms of:

• profitability
• banking licences
• valuation realism
• IPO readiness