French Fintech Qonto Raises New Funds at $5 Billion Valuation

(Bloomberg) -- French fintech Qonto has raised 486 million euros in a funding round that valued the company at 4.4 billion euros ($5 billion).

Tiger Global and TCV led the funding round and were among 10 new investors in the company; KKR was also among the first-time participants, Qonto said in a statement on Tuesday. Existing investors including Tencent also contributed funds.

Qonto offers financial services such as banking and expense management to SMEs and freelancers. The new money will be used to invest in its products, customer service and acquiring new talent, co-founder and Chief Executive Officer Alexandre Prot said in the statement. The company will also boost its presence in Germany, Italy and Spain by investing 100 million euros in each of these over the next two years.

French startups are closing significant fundraises lately, with human resources tech Payfit and marketplace Ankorstore both raising about 250 million euros this year. Fintech firms, which are increasingly challenging traditional banks on their own turf, are especially gaining investors’ interest, with firms such as payment app Lydia becoming unicorns.

Prot said the company has just a fraction of the 25 million potential SME customers in its addressable market.

“We are still below 1% of this market,” he said in an interview. “There is still a lot to do.”

The firm plans to open new markets in Europe by next year, and aims to reach 1 million customers across Europe by 2025. It intends to quadruple its staff to more than 2,000 in that period. 

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