French fintech Qonto nears $5 billion valuation after new fundraising

© Reuters.

By Mathieu Rosemain

PARIS (Reuters) – Qonto, a French online bank for small and medium-sized companies (SMEs), said on Tuesday it had raised 486 million euros, bringing its valuation to 4.4 billion euros ($4.98 billion), in another sign of the good health of the French fintech sector.

France has recorded a streak of large private equity fundraising, as the combination of low interest rates, investment incentives and stay-at-home measures due to the COVID-19 pandemic have boosted digital companies.

Qonto’s latest fundraising is a record for a French fintech, a startup that specialise in financial services. It was led by investment firm Tiger Global and private equity fund TCV, and were followed by eight other, new contributors, including Eurazeo (PA:), KKR and Alkeon.

Previous investors, which include Valar, Alven, DST Global and Chinese tech giant Tencent (HK:), also participated in the funding, Qonto said.

The five-year-old company has a banking license for payments and offers bookkeeping and financial management services for SMEs at a monthly subscription price starting at 9 euros ($10.20).

It has recently partnered with another French fintech, October, which offers SMEs small loans of up to 30,000 euros. It has also partnered with Payfit, a software company that has developed a payroll platform.

“Our goal is to make life as easy as possible for companies,” said co-founder and CEO Alexandre Prot. The company says it has 220,000 clients across four countries, including France, Germany, Italy and Spain.

The money it has raised will allow it to quadruple its staff to 2,000 by 2025, it said, with the aim to bring the number of clients to 1 million SMEs and freelancers.

The startup plans to enter new markets in 2023, but did not say which. Qonto does not disclose its financial figures.

($1 = 0.8832 euros)

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