N26’s top executives accused the co-founders of one of Europe’s most highly valued fintechs of promoting a “culture of fear” that threatened to drive the group into a “downward spiral”.
In an explosive memo sent last year, N26’s six most senior employees warned Max Tayenthal and Valentin Stalf that their “relationship and ways of working” with executives at the German company were “quite dysfunctional in several dimensions”.
The internal “discussion document” was sent in February 2022 by Thomas Grosse, who was N26’s chief risk officer until he resigned last week. It was co-authored by chief financial officer Jan Kemper, interim head of HR Eva Glanzer, chief product officer Gilles BianRosa, chief technology officer 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 counts Silicon Valley billionaire Peter Thiel and Hong Kong tycoon Li Ka-shing among its backers, was valued at more than €7.7bn in a fundraising in October 2021.
However, the group, which has 8mn retail customers across Germany and more than 20 other countries, has been blighted by growing pains and was ordered by Germany’s financial regulator to upgrade its internal controls.
In October 2021, BaFin imposed a draconian cap on N26’s client growth after the regulator became increasingly concerned with organisational flaws at the company.
The memo, which was sent only months after N26’s fundraising, warned Tayenthal and Stalf that the leadership team “is not functioning in a productive (or even merely adequate) way”. This, it added, had resulted in a level of “churn as well as continuous organisational dysfunctionalities”.
The co-founders were accused of a “lack of trust in executives and broad organisation” that was resulting in “confusion and lower progress”. In a scathing critique, Tayenthal and Stalf were also said to have a habit of “rewriting history on agreed topics” and a tendency to “shoot the messenger” if decisions taken turned out to be wrong.
“Of particular concern is the establishment of a culture of ‘fear’ and blaming, fostered by many of the behavioural problems 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 internal information” but stressed that it has made “significant investments into governance and leadership” over the past 18 months. “We take that seriously at all levels of the company, including at senior leadership level. Feedback is an essential part of this.”
The internal memo was reported earlier on Tuesday by Germany’s Manager Magazin.
N26 overhauled its governance last November, when it established 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 building N26 into “a leading digital bank” has been “a steep learning curve for me personally but also for the wider business,” while Stalf said that “an open feedback culture is central to this collaboration.”
However, the problems described in the memo remain just as pressing than when it was sent, according to people familiar with internal discussions at N26.
Over the past 12 months N26 has lost some of its most senior managers, with Grosse being the most recent departure. While the bank said that his exit was caused by his “personal circumstances”, Grosse told the FT that the “reasons for my decision are complex”. He declined to comment further.
Weber has informed N26 that he wants to leave later this year after nine years at the company, according to people familiar with the matter.
N26 told the FT that Weber “from the beginning of his career [ . . .] had the vision of founding his own company and always exchanged ideas with both founders about the right time to start his own venture,” adding that there was “no new information on this at this time”. Weber declined to comment beyond N26’s statement.