N26 executives have accused the co-founders of one of Europe’s most beloved fintechs of promoting a “culture of fear” that threatened to send the group into a “downward spiral”.
In an explosive note sent last year, N26 six senior employees warned Max Tayenthal and Valentin Stalf that their “relationships and ways of working” with the German company’s executives were “quite dysfunctional in several respects”.
The internal “discussion paper” was sent in February 2022 by Thomas Grosse, who was N26’s Chief Risk Officer until his resignation last week. It was co-authored by CFO Jan Kemper, Acting HR Director Eva Glanzer, Product Director Gilles BianRosa, CTO Gino Cordt and Chief Growth Officer Alex Weber.
Glanzer and Kemper have also since left N26, which was founded in 2013 to disrupt Germany’s banking industry. The company, which has Silicon Valley billionaires Pierre Thiel and Hong Kong tycoon Li Ka-shing among its backers, was valued at more than 7.7 billion euros in a fundraising round in October 2021.
However, the group, which has 8 million retail customers in Germany and more than 20 other countries, has been plagued by growing pains and has been ordered by the German financial regulator to upgrade its internal controls.
In October 2021, BaFin imposed a draconian cap on N26’s customer growth after the regulator became increasingly concerned about the company’s organizational flaws.
The memo, which was sent just months after N26’s fundraising, warned Tayenthal and Stalf that the management team “is not functioning productively (or even just adequately).” This, he added, had resulted in a level of “churn as well as continued organizational dysfunction”.
The co-founders were accused of a “lack of trust in leadership and the wider organization” which led to “confusion”. In a scathing review, Tayenthal and Stalf are also said to have a habit of “rewriting history on agreed topics” and a tendency to “shoot the messenger” if decisions made turn out to be wrong.
“The establishment of a culture of ‘fear’ and blame is of particular concern, fostered by many behavioral issues that we want to address,” the memo notes.
In a statement to the Financial Times, N26 declined to comment on “any internal conversations, emails or other inside information”, but stressed that it had made “significant investments in governance and leadership” over the past 18 years. month. “We take this seriously at all levels of the company, including at the senior management level. Feedback is an essential part of this.
The internal memo was reported earlier on Tuesday by German magazine Manager Magazin.
N26 reviewed its governance last November, creating a supervisory board that oversees and appoints the executive board. The Supervisory Board is chaired by Marcus Mosen, a payments industry veteran and early investor in N26.
Tayenthal said in a statement to the FT that N26’s transformation into “a leading digital bank” has been “a steep learning curve for me personally but also for the business at large”, while Stalf said that “a culture of open feedback is at the heart of this collaboration”.
However, the issues outlined in the memo remain just as pressing as when it was sent, according to sources familiar with internal discussions at N26.
Over the past 12 months, N26 has lost some of its top executives, with Grosse being the most recent departure. While the bank said his exit was caused by his “personal situation”, Grosse told the FT the “reasons for my decision are complex”. He declined to comment further.
Weber told N26 he wants to leave later this year after nine years with the company, according to people familiar with the matter.
N26 told the FT that Weber “from the start of his career (. . .) had a vision to start his own business and always exchanged ideas with the two founders on when was the right time to start his own business”, adding that there was “no new information on this at this time.” Weber declined to comment beyond N26’s statement.
This article has been edited to remove a reference to “lower progression” that was not in the memo