Qonto, a French business, has raised $552 million (€486 million) in a Series D fundraising round. The startup has now been valued at $5 billion (€4.4 billion) as a result of this financing. This is one of the most significant funding rounds in the French IT scene.
Qonto is a challenger bank that specialises in business accounts. Small and medium businesses, as well as freelancers, are the primary targets of the startup. It has operations in France, Germany, Italy, and Spain at the moment.
Today’s investment round is led by Tiger Global and TCV. Qonto, which already has 220,000 customers, intends to continue to expand rapidly in the next years. “By 2025, we want to have one million SMEs,” Alexandre Prot, co-founder and CEO, told me. “And we know Tiger and TCV have helped a lot of firms get to that level.”
Alkeon, Eurazeo, KKR, Insight Partners, Exor Seeds, Guillaume Pousaz, Gaingels, and Ashley Flucas are among the new investors in the round. Existing investors Valar, Alven, DST Global, and Tencent are also increasing their investments.
That’s a long list of investors, and Qonto demonstrates that private equity firms in Europe are aggressively seeking late-stage development rounds.
From regular banking to an all-in-one financial solution, we’ve got you covered
What makes Qonto unique is that it is a really European startup. Spend control technologies like Brex and Ramp have been hugely popular in the United States. They want to replace American Express and give corporate cards to millions of employees in the United States, according to Kate Clark of The Information.
Qonto began with business bank accounts because they are the most important financial component of European businesses. Many businesses transfer funds directly from their bank accounts. They set up direct debits to pay bills, provide their bank account information (IBAN) to receive payments, and conduct transfers.
And Qonto excels in this area. You can join up using a computer and receive a local IBAN in a matter of minutes. After that, you can order debit cards to use in place of your credit card.
Qonto initially relied significantly on Treezor, a third-party banking partner. After then, the company asked for its own licence to operate as a payment institution. Qonto will migrate all of its clients to its in-house core banking system by 2020. This essential component of the technology stack is now owned by the corporation.
Qonto is now more than just a bank account. Qonto is defined by Alexandre Prot, the company’s CEO, as “three different products folded into a single service.” It also streamlines bookkeeping and accounting, in addition to ordinary banking. It can also be used as an expenditure management tool.
Qonto allows you to export or sync your bookkeeping data with your existing accounting software. Because each country utilises various accounting tools, this is a fragmented market. If you’re a French firm, you can export your data to Cegid, and if you’re a German company, you can synchronise with Datev, and so on. Users of Qonto can also import receipts directly into their accounts.
When it comes to expenditure management, Qonto allows you to provide employees real, virtual, or one-time cards. Admins can define multiple spending restrictions, an approval workflow, and anything else you’d expect from a spend control system. It may not have as many features as a specialist product like Spendesk, but it may be sufficient for small businesses.
Qonto collaborates with other fintech businesses for anything else. Customers can, for example, acquire a credit line with October and borrow between €15,000 and €30,000. Cashbee and its banking partner, My Money Bank, provide customers the option of opening a savings account.
Having just one bank account
Every month, almost 220,000 businesses pay for Qonto. The most basic freelancer account costs €9 per month, while enterprise accounts cost €249 per month. Furthermore, some businesses pay more to obtain additional cards or to exceed specific limits.
The fact that many clients sign up on their own makes the business model even more profitable. They employ Qonto for the initial capital deposit in order to register their firm when they start it. Qonto is a SaaS company that blends inbound marketing with significant profitability.
“We helped around a third of our consumers start their businesses.” “It’s their very first and only account,” Alexandre Prot explained. “Two-thirds of our customers were already in business before they signed up with us. Approximately half of them close their previous bank account, while the other half uses Qonto in addition to one or more accounts.”
Given today’s funding, the company hopes to expand its workforce from 500 to 2,000 workers by 2025. Qonto will also make significant investments in its existing markets. “On each of our markets, we will be able to invest more than €100 million,” Prot added. While many SMEs in France, Germany, Spain, and Italy still do not use Qonto, the company hopes to expand into new markets in 2023.
Subtly charming pop culture geek. Amateur analyst. Freelance tv buff. Coffee lover