Qonto business banking will start raising $ 552 million at a $ 5 billion valuation - TechCrunch
French startup Qonto has raised a $ 552 million (€ 486 million) Series D funding round. Following this investment, the start-up business has reached a valuation of $ 5 billion (€ 4.4 billion). This is one of the biggest cycles in the French tech ecosystem.
Qonto is a challenging bank with a focus on business bank accounts. The start-up business is aimed primarily at SMEs as well as freelancers. He currently works in France, Germany, Italy and Spain.
Tiger Global and TCV are in charge of a funding round today. With 220,000 clients, Qonto still expects rapid growth in the coming years. “Our goal is to reach one million SMEs by 2025,” co-founder and CEO Alexandre Prot told me. "And we know that Tiger and TCV have supported a number of companies to reach that level."
Some new investors are also taking part in the tour, such as Alkeon, Eurazeo, KKR, Insight Partners, Exor Seeds, Guillaume Pousaz, Gaingels and Ashley Flucas. Current investors Valar, Alven, DST Global and Tencent are putting more money on the table as well.
That's a long list of investors, and Qonto confirms once again that private equity firms are actively looking for growth cycles at a late stage in Europe.
From everyday banking to an all-in-one financial solution
What makes Qonto interesting is that it's a real European start. In the US, consumption control solutions, such as Brex and Ramp, have been extremely successful. As Kate Clark stated at The Information, they want to replace American Express and issue corporate cards to millions of employees in the US
Qonto started with business bank accounts as it is the main financial component of European companies. Many companies use their bank accounts directly to move money around. They initiate transfers, share their bank account number (IBAN) to receive payments and set up direct debits to pay bills.
And Qonto does that very well. You can register from a computer and get a local IBAN a few minutes later. After that, you can also order debit cards to pay with your card.
Initially, Qonto relied heavily on a third - party banking partner - Treezor. The beginner then applied for his own license to become a payment center. In 2022, Qonto moved all of its clients to its core internal banking system. The company now owns this crucial part of the technical stack.
Qonto has expanded beyond the simple bank account. Startup CEO Alexandre Prot defines Qonto as three different products rolled into one service. In addition to the day-to-day banking component, it also simplifies bookkeeping and accounting. It can also be your spending management solution.
For bookkeeping, Qonto allows you to export or sync with your existing accounting solution. This is a fragmented market as each country uses different accounting tools. For example, you can export your data to Cegid if you are a French company, you can sync with Datev if you are a German company, and so on. Qonto users can also deposit receipts directly into their Qonto account.
In terms of spending management, Qonto allows you to issue physical, virtual or one-time cards to employees. Administrators can set various cost limits, licensing workflows and all the custom materials you get from a consumption management solution. It may not be as complete a feature as a particular product, such as Spendesk, but it may be enough for small companies.
For everything else, Qonto partners with other fintech startups. For example, customers can open a line of credit with October and a loan of € 15,000 to € 30,000. Customers can also open a savings account with Cashbee and its banking partner My Money Bank.
One bank account
220,000 companies pay for Qonto every month. Prices range from € 9 per month for the most basic volunteer account to € 249 per month for enterprise accounts. In addition, some companies pay more to get more cards or when they go above certain limits.
What makes the business model even more profitable is that many customers just sign up on their own. When they create their company, they use Qonto for the initial capital investment to register the company. Essentially, Qonto combines inbound marketing with the high margins of SaaS production.
“About a third of our customers set up their companies with us. This is their first account and the only one they use, "said Alexandre Prot." Two - thirds of our customers are companies that existed before they opened an account with us. half of them close their bank account, and half of them use Qonto at the same time as one or more accounts. ”
With today's funding round, the company expects to grow its team from 500 employees to 2,000 by 2025. Qonto will also be investing heavily in its existing markets. "We will be able to invest more than € 100 million in each of our markets," said Prot. Qonto also plans to enter the new market in 2023.