Valentin Stalf, founder and CEO of N26, speaks on stage at the Digital Life Design innovation conference.

German online bank N26 said Thursday that it raised a huge $170 million in additional funding, valuing the six-year-old fintech start-up at $3.5 billion.

Based in Berlin, N26 has made waves in Europe with its app-based checking account and debit card. The firm doesn't operate any brick-and-mortar branches, and yet has managed to lure in over 3.5 million customers across 24 countries in the continent.

The latest capital injection is a top-up to the firm's $300 million fundraising, announced back in January, which saw it valued at $2.7 billion. N26 said existing investors, including Peter Thiel's Valar Ventures, Chinese tech giant Tencent and Singaporean sovereign wealth fund GIC, backed this latest round.

"I think investors around the world see the disappointment customers face in retail banking," N26 CEO Valentin Stalf told CNBC in an interview. "At the same time they see it's a huge market."

He added that the firm's eye-watering valuation is "decent and actually low" for a company of its kind. "I think the company has the opportunity to be worth much more in the future," Stalf said. For comparison, British competitor Monzo was recently valued by investors at $2.5 billion in its latest round of funding.

The fresh cash will help N26 ramp up hiring and fuel its global expansion strategy. The company currently has 1,300 employees globally. Having recently launched in the U.S., the German fintech firm now has its sights set on Brazil, and is due to launch their next year.