Qonto, a French business banking startup has raised $552 million (€486 million) in a Series D funding round, bringing its valuation to $5 billion (€4.4 billion). The funding round was led by Tiger Global and TCV, and saw the participation of existing investors Valar, Alven, DST Global and Tencent, and new investors Alkeon, Eurazeo, KKR, Insight Partners, Exor Seeds, Guillaume Pousaz, Gaingels and Ashley Flucas.
Qonto’s Series D funding round is one of the largest rounds in France’s tech space. The funding round is a huge indicator that investors want to leverage opportunities in late-stage growth rounds in the European stage.
Qonto which is a neo or challenger bank that focuses on business bank accounts is currently operational in France, Germany, Italy and Spain. It focuses on small and medium scale companies and freelancers. It boasts of 220,000 clients and plans on increasing growth in all aspects of its business as time goes by. According to co-founder and CEO Alexandre Prot, “Our goal is to reach one million in SMEs by 2025. And we know that Tiger and TCV have supported quite a few companies to reach that scale”.
Compared to the time the startup first appeared into the scene, Qonto has made quite a huge leap. The startup started with bank accounts as they were the major component of European companies. Transfers and bills payments are done using banks accounts majorly. Qonto also operates this way, one can easily sign up and get a local IBAN number within minutes as well as request debit cards with which payments can be done. It used to operate in a partnership with Treezor but eventually acquired a license to operate on its own.
Today, the startup has expanded beyond operating a simple bank account. As described by its CEO, it operates a three-in-one product. It simplifies bookkeeping and accounting and can be used as a management solution to track one’s spending as well.
Qonto also has partnerships with other fintech companies. An example of this is its partnership with October, which allows users to open a credit line and borrow between €15,000 to €30,000 or open a savings account with Cashbee.
Qonto plans on increasing its current team of 500 to 2,000 by 2025 thanks to the funding it received. It will also invest hugely in existing markets and venture into new ones by 2023.