“Is Qonto an actual financial institution?” is likely one of the prime urged questions in Google searches in regards to the French fintech startup. The reply is not any, but it surely may change: Qonto has filed for a banking license in France, CEO Alexandre Prot revealed.
Qonto, which targets European freelancers and SMBs, presently operates with a fee establishment license it obtained 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 provide broader lending, financial savings, and funding choices to its goal prospects.
Since its present license is legitimate throughout the EU, Qonto has already been capable of increase into a number of European markets, and lately reached the milestone of 600,000 prospects. However missing a credit score license is a hindrance for its objective to succeed in 2 million prospects by 2030.
Whereas providing a extra complete resolution looks as if a pure transfer to compete with incumbent banks, acquiring a license and rolling out credit score isn’t straightforward. That explains why Qonto’s SMB fintech rivals have approached this difficulty in numerous methods, and why Qonto isn’t precisely taking part in catch-up.
Memo Financial institution was based as a financial institution from the outset, and gives lending to SMBs, however that makes it an outlier. Finom operates with an digital cash establishment (EMI) license, but it surely solely simply began testing the type of lending that this regulatory center floor permits. Revolut has a full Lithuanian license, however aside from BNPL, it has but to roll out credit score choices to companies — though it plans to take action this yr.
Nonetheless, the advertising and marketing energy of well-funded rivals that function each in B2C and B2B could have been an indication that Qonto wanted to speed up, particularly as Revolut lately loudly introduced plans to hunt a French license and flip Paris into its Western Europe HQ.
Not mentioning rivals, Prot stated that Qonto’s timing was pushed by “having achieved profitability forward of schedule 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 not only a guess. Throughout a press briefing, Prot confirmed that he and co-founder Steve Anavi severely thought of the concept at one level, however in the end dismissed it as a result of it might have required an excessive amount of time and extra fundraising.
Having been worthwhile since 2023 implies that this hurdle now received’t require Qonto to boost extra funding than the $552 million it secured in 2022 at a $5 billion valuation. Prot lately stated that “the principle, or the one motive, why we may elevate extra capital is that if we do a big or very massive M&A deal, paid principally in money.”
In its eight years of existence, 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 administration resolution, with an providing that additionally consists of instruments for invoicing and bookkeeping.
This strategy helped it develop within the B2B section throughout Europe. Prot declined to offer a full breakdown of its 600,000 prospects, however he stated that Germany is now Qonto’s largest market after France. In unspecified order, Spain and Italy come subsequent, adopted by the markets it entered in late 2024: Austria, Belgium, the Netherlands, and Portugal.
Nonetheless, Prot operates underneath the idea that some prospects received’t select Qonto until it’s a credit score establishment. That’s as a result of this might grant them extra ensures on their deposits, and since they need credit score to be an possibility in the event that they ever want it, which some already do.
Qonto validated that demand for credit score with its Pay Later service; launched in 2024, it has already facilitated €50 million in financing, in response to the corporate (roughly $59 million). However the provide is restricted by its present license — each for Qonto, which might solely lend from its personal fairness, and for its prospects, who can’t borrow for longer than 12 months.
To assist its prospects entry different sorts of loans, Qonto additionally put collectively a “financing hub” with third-party fintech companions together with Defacto, Karmen, Riverbank, and Silvr. Prot stated Qonto plans to maintain it for not less than a number of extra years. And a few of these choices are extra particular than what the corporate could need to get into.
Nonetheless, turning into a credit score establishment in its personal proper would unlock new income 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 reveal income figures however stated that income elevated by 30% within the final yr.
Nonetheless, Prot stated that this extra income wasn’t the principle issue at play. Buying new prospects apart, Qonto additionally sees this as a chance to rely much less on others and launch new merchandise quicker. In the identical vein, it lately constructed an in-house card processor to extend acceptance charges whereas decreasing its reliance on third events.
With a workforce of 1,600 individuals, Qonto now hopes that it’s going to have the bandwidth to work on new product developments, such because the AI-enabled “Qonto Intelligence” layer, whereas additionally enhancing its banking infrastructure and danger administration groups.
The latter can also be aimed to reveal its readiness to France’s banking supervisor, with which it plans to work carefully to acquire its license. The method should still take years, however it is usually a part of a broader “rising up” effort for Qonto, which lately added a number of senior profiles to its board of administrators. These steps may additionally assist lay the groundwork for a future IPO, although that is still a longer-term prospect.
