French startup Qonto has raised a $552 million Sequence D funding spherical (€486 million). Following this funding, the startup has reached a valuation of $5 billion (€4.4 billion). This is without doubt one of the largest rounds within the French tech ecosystem.
Qonto is a challenger financial institution targeted on enterprise financial institution accounts. The startup focuses totally on small and medium corporations in addition to freelancers. It presently operates in France, Germany, Italy and Spain.
Tiger Global and TCV are main at present’s funding spherical. With 220,000 shoppers, Qonto nonetheless plans to develop at a rapide tempo within the coming years. “Our objective is to achieve a million SMEs by 2025,” co-founder and CEO Alexandre Prot informed me. “And we all know that Tiger and TCV have supported fairly a number of corporations to achieve that scale.”
Some new buyers are additionally collaborating within the spherical, similar to Alkeon, Eurazeo, KKR, Perception Companions, Exor Seeds, Guillaume Pousaz, Gaingels and Ashley Flucas. Present buyers Valar, Alven, DST International and Tencent are placing extra money on the desk as nicely.
That’s fairly a protracted listing of buyers and Qonto proves as soon as once more that personal fairness corporations are actively searching for late-stage development rounds in Europe.
From on a regular basis banking to an all-in-one finance answer
What’s attention-grabbing with Qonto is that it’s a really European startup. Within the U.S., spend administration options, similar to Brex and Ramp, have been massively profitable. As The Data’s Kate Clark reported, they need to replace American Express and hand out company playing cards to thousands and thousands of staff within the U.S.
Qonto began out with enterprise financial institution accounts as a result of that’s the important thing monetary part of European corporations. Many corporations use their financial institution accounts straight to maneuver cash round. They provoke transfers, share their checking account quantity (IBAN) to obtain a fee and arrange direct debits to pay payments.
And Qonto does that actually nicely. You’ll be able to join from a pc and get a neighborhood IBAN a couple of minutes later. After that, you can even order debit playing cards to pay together with your card.
At first, Qonto relied closely on a third-party banking associate — Treezor. The startup then utilized to get its personal license to develop into a fee establishment. In 2020, Qonto moved all its shoppers to its in-house core banking system. The corporate now owns this important a part of the technical stack.
Qonto has expanded past the easy checking account. The startup’s CEO Alexandre Prot defines Qonto as three totally different merchandise rolled right into a single service. Along with the on a regular basis banking half, it additionally simplifies bookkeeping and accounting. It might develop into your spend administration answer as nicely.
On the bookkeeping entrance, Qonto permits you to export or sync together with your existing accounting solution. This can be a fragmented market as every nation makes use of totally different accounting instruments. As an example, you may export your knowledge to Cegid in the event you’re a French firm, you may synchronize with Datev in the event you’re a German firm, and so on. Qonto customers may also import receipts straight of their Qonto account.
As for spend administration, Qonto permits you to hand out bodily, digital or one-time playing cards to staff. Admins can arrange totally different spending limits, an approval workflow and all the same old stuff that you just get from a spend administration answer. It may not be as characteristic full as a devoted product, similar to Spendesk, however it may very well be sufficient for small corporations.
For every thing else, Qonto companions with different fintech startups. As an example, prospects can open a credit score line with October and borrow €15,000 to €30,000. Prospects may also open a financial savings account with Cashbee and its banking associate My Cash Financial institution.
A single checking account
There are 220,000 corporations paying for Qonto each month. Pricing ranges from €9 per thirty days for essentially the most primary freelancer account to €249 per thirty days for enterprise accounts. On prime of that, some corporations pay extra to get extra playing cards or after they go above sure limits.
What makes the enterprise mannequin much more profitable is that loads of prospects simply join on their very own. After they create their firm, they use Qonto for the preliminary capital deposit with the intention to register the corporate. Basically, Qonto combines inbound advertising and marketing with the excessive margins of a SaaS product.
“Round a 3rd of our prospects created their corporations with us. It’s their first account and the one one which they use,” Alexandre Prot stated. “Two-thirds of our prospects are corporations that existed earlier than they opened an account with us. Roughly half of them shut their current checking account, half of them use Qonto in parallel with one or a number of accounts.”
With at present’s funding spherical, the corporate plans to develop its group from 500 staff to 2,000 folks by 2025. Qonto will even make investments closely in its current markets. “We can make investments greater than €100 million on every of our markets,” Prot stated. Whereas there are nonetheless loads of SMEs that aren’t utilizing Qonto in France, Germany, Spain and Italy, Qonto additionally plans to enter new market in 2023.