“Is Qonto an actual financial institution?” is among the most sensible recommended questions in Google searches in regards to the French fintech startup. The solution is not any, however it might alternate: Qonto has filed for a banking license in France, CEO Alexandre Prot printed.
Qonto, which goals Eu freelancers and SMBs, recently operates with a fee establishment license it got in 2018, and which already enabled it to introduce a type of purchase now, pay later (BNPL). However a credit score establishment license would let it be offering broader lending, financial savings, and funding choices to its goal shoppers.
Since its present license is legitimate around the EU, Qonto has already been in a position to make bigger into a number of Eu markets, and just lately reached the milestone of 600,000 shoppers. However missing a credit score license is a hindrance for its objective to achieve 2 million shoppers by means of 2030.
Whilst providing a extra complete resolution turns out like a herbal transfer to compete with incumbent banks, acquiring a license and rolling out credit score isn’t simple. That explains why Qonto’s SMB fintech competition have approached this factor in numerous tactics, and why Qonto isn’t precisely enjoying catch-up.
Memo Financial institution used to be based as a financial institution from the outset, and provides lending to SMBs, however that makes it an outlier. Finom operates with an digital cash establishment (EMI) license, nevertheless it best simply began trying out the type of lending that this regulatory center floor lets in. Revolut has a complete Lithuanian license, however rather than BNPL, it has but to roll out credit score choices to companies — even though it plans to take action this yr.
Nonetheless, the promoting energy of well-funded competition that function each in B2C and B2B will have been an indication that Qonto had to boost up, particularly as Revolut just lately loudly introduced plans to hunt a French license and flip Paris into its Western Europe HQ.
Now not bringing up competition, Prot stated that Qonto’s timing used to be pushed by means of “having completed profitability forward of agenda in 2023.”
The son of former BNP Paribas President Baudouin Prot, Qonto’s CEO had clearly already considered pursuing a credit score license — and that’s now not only a wager. Throughout a press briefing, Prot showed that he and co-founder Steve Anavi severely regarded as the speculation at one level, however in the long run disregarded it as a result of it might have required an excessive amount of time and further fundraising.
Having been winning since 2023 implies that this hurdle now gained’t require Qonto to lift extra investment than the $552 million it secured in 2022 at a $5 billion valuation. Prot just lately stated that “the primary, or the one explanation why, why lets lift further capital is that if we do a big or very massive M&A deal, paid most commonly in money.”
In its 8 years of life, Qonto has made two acquisitions: It took over its German competitor Penta in 2022, and it purchased accounting and monetary automation platform Regate in 2024.
The latter is a mirrored image of Qonto’s positioning past banking and as an built-in finance control resolution, with an providing that still comprises gear for invoicing and bookkeeping.
This way helped it develop within the B2B phase throughout Europe. Prot declined to offer a complete breakdown of its 600,000 shoppers, however he stated that Germany is now Qonto’s biggest marketplace after France. In unspecified order, Spain and Italy come subsequent, adopted by means of the markets it entered in past due 2024: Austria, Belgium, the Netherlands, and Portugal.
Nonetheless, Prot operates underneath the belief that some shoppers gained’t select Qonto except this is a credit score establishment. That’s as a result of this may grant them further promises on their deposits, and since they would like credit score to be an possibility in the event that they ever want it, which some already do.
Qonto validated that call for for credit score with its Pay Later carrier; introduced in 2024, it has already facilitated €50 million in financing, consistent with the corporate (roughly $59 million). However the be offering is restricted by means of its present license — each for Qonto, which is able to best lend from its personal fairness, and for its shoppers, who can’t borrow for longer than 365 days.
To lend a hand its shoppers get right of entry to different sorts of loans, Qonto additionally put in combination a “financing hub” with third-party fintech companions together with Defacto, Karmen, Riverbank, and Silvr. Prot stated Qonto plans to stay it for no less than a couple of extra years. And a few of these choices are extra particular than what the corporate might need to get into.
Nonetheless, turning into a credit score establishment in its personal proper would liberate new earnings for Qonto, each from the margin on credit and extra upside from deposits, which it might have the ability to use for lending. Prot declined to expose earnings figures however stated that earnings higher by means of 30% within the closing yr.
On the other hand, Prot stated that this extra earnings wasn’t the primary issue at play. Obtaining new shoppers apart, Qonto additionally sees this as a chance to rely much less on others and release new merchandise quicker. In the similar vein, it just lately constructed an in-house card processor to extend acceptance charges whilst lowering its reliance on 0.33 events.
With a crew of one,600 other people, Qonto now hopes that it’ll have the bandwidth to paintings on new product trends, such because the AI-enabled “Qonto Intelligence” layer, whilst additionally bettering its banking infrastructure and possibility control groups.
The latter may be aimed to show its readiness to France’s banking manager, with which it plans to paintings intently to acquire its license. The method might nonetheless take years, however it’s also a part of a broader “rising up” effort for Qonto, which just lately added a number of senior profiles to its board of administrators. Those steps may additionally lend a hand lay the groundwork for a long run IPO, even though that continues to be a longer-term prospect.
