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Qonto bags the largest funding round in French tech ecosystem with $552M at $5B valuation

Qonto
Qonto

France is on a roll with the advent of the new year. First, a huge funding round of HR tech PayFit, which bagged a $289 million investment last week. Yesterday, Ankorstore joined the unicorn club with a massive $283M funding round at a $2B valuation

And just now, Qonto, a Paris-based challenger bank that specialises in business bank accounts and targets small and medium-sized businesses, has secured $552M in Series D funding, which takes its valuation to $5 billion. 

The round was co-led by new investors Tiger Global and TCV, as well as eight more new contributors: Alkeon, Eurazeo, KKR, Insight Partners, Exor Seeds, Guillaume Pousaz, Gaingels, and Ashley Flucas. It was also joined by current investors Valar, Alven, DST Global, and Tencent in investing in this new funding round. This is touted to be one of the largest funding rounds in the French tech ecosystem.

Already present now in France, Germany, Italy, and Spain, Qonto currently has 220,000 customers and intends to expand rapidly in the next few years with the new investment. “Our goal is to reach one million SMEs by 2025,” said Alexandre Prot, co-founder and CEO. “And we know that Tiger and TCV have helped a number of organisations achieve that scale.”

Big expansion plans

With the proceeds, the firm intends to continue expanding its product offering through in-house development, new strategic partnerships, and prospective acquisitions to guarantee that it provides the best product on the market to its clients.

Further, the company intends to expand its staff from 500 to 2,000 individuals by 2025.

Alexandre Prot, co-founder and CEO of Qonto: “Since our launch in 2017, we’ve constantly strived to create the finance solution that energises SMEs and freelancers, empowering them to achieve more. This new Series D funding round is an amazing opportunity for us to accelerate our hyper-growth trajectory by investing in our product, our customer service and our power to attract new talents. This funding round reveals the incredible dynamism of the French and European Tech ecosystem. We count on policymakers to continue their efforts to ensure entrepreneurship can succeed, leading to European and global champions that deliver innovation. This is only the beginning of our journey to best serve SMEs and freelancers and we couldn’t be more excited about what the future holds for us and our ambitions. The Qonto team is honored to welcome the most prestigious international investors to support our mission to become the leading business finance solution.”

Qonto, founded in 2017 by Steve Anavi and Alexandre Prot, has over 220,000 clients in four countries (France, Germany, Italy, and Spain) and employs over 500 people in Paris, Berlin, Milan, and Barcelona. 

To support its worldwide growth objectives, Qonto has raised a total of €622M from Valar, Alven, the European Investment Bank, Tencent, DST Global, Tiger Global, TCV, Alkeon, Eurazeo, KKR, Insight Partners, Exor, and Gaingels.

The online business account for SMEs and freelancers

Qonto began with business bank accounts because they are European businesses’ most important financial component. Many businesses transfer funds directly from their bank accounts. They start transfers, provide their bank account number (IBAN) in order to receive payment, and set up direct debits to pay bills.

And Qonto accomplishes it exceptionally well. You can sign up from a computer and receive a local IBAN in a matter of minutes. Following that, you can order debit cards to pay with your card.

Qonto has evolved beyond the traditional bank account and operates three different products packaged into one service. It streamlines bookkeeping and accounting in addition to ordinary banking. It can also serve as your expenditure management solution.

In terms of bookkeeping, Qonto allows you to export or sync with your existing accounting solution. This is a fragmented market since each country employs a different set of accounting techniques. For example, if you are a French firm, you may export your data to Cegid, and if you are a German company, you can synchronise with Datev, and so on. Receipts can also be imported straight into a Qonto account.

In terms of spending management, Qonto allows you to issue real, virtual, or one-time cards to employees. Admins can configure multiple spending limits, an approval workflow, and all the other features you’d expect from a spend control solution. It may not be as feature-rich as a dedicated solution like Spendesk, but it may suffice for small businesses.

Qonto collaborates with other fintech firms on everything else.

Companies pay a monthly fee ranging from €9 for the most basic freelancer account to €249 for corporate accounts. Furthermore, some businesses pay more to obtain more cards or to exceed specified limits.

What makes the business model even more profitable is that many clients sign up on their own. They employ Qonto for the initial capital deposit in order to register their firm when they start it. Qonto is essentially a combination of inbound marketing and the huge profits of a SaaS solution.

John Curtius, Partner at Tiger Global: “Qonto has revolutionised business finance for SMEs and freelancers by marrying simplicity with a unique all-in-one service. The company has seen a significant increase in clients across its European markets during the coronavirus pandemic. This also shows that customers’ needs are evolving during these unprecedented times. We have tracked Qonto’s incredible growth for some time and are delighted to partner with the entire Qonto team and support their mission to serve a rapidly growing European market.”

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