French fintech Qonto approaches $ 5 billion valuation after new fundraising

The euro coins are visible in front of the French flag displayed in this photo taken on May 7, 2017. REUTERS / Dado Ruvic / Illustration

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PARIS, January 11 (Reuters) – Qonto, a French online bank for small and medium-sized enterprises (SMEs), announced on Tuesday that it had raised 486 million euros, bringing its valuation to 4.4 billion euros (4, 98 billion dollars), in another sign of the good health of the French fintech sector.

France has seen a streak of large private equity fundraising as the combination of low interest rates, investment incentives and home support measures due to the COVID-19 pandemic has boosted digital businesses.

Qonto’s latest fundraising is a record for a French fintech, a startup specializing in financial services. It was led by investment firm Tiger Global and private equity fund TCV, and was followed by eight other new contributors, including Eurazeo (EURA.PA), KKR (KKR.N) and Alkeon.

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Previous investors including Valar, Alven, DST Global and Chinese tech giant Tencent (0700.HK) also participated in the funding, Qonto said.

The five-year-old company has a banking license for payments and offers accounting and financial management services for SMEs at a monthly subscription price starting at 9 euros ($ 10.20).

It recently joined forces with another French fintech, October, which offers small loans of up to 30,000 euros to SMEs. He also partnered with Payfit, a software company that developed a payroll platform.

“Our goal is to make life as easy as possible for businesses,” said co-founder and CEO Alexandre Prot. The company says it has 220,000 customers in four countries, including France, Germany, Italy and Spain.

The money he has raised will allow him to quadruple its workforce to 2,000 by 2025, he said, with the aim of increasing the number of clients to 1 million SMEs and self-employed.

The startup plans to enter new markets in 2023, but has not specified which ones. Qonto does not disclose its financial figures.

($ 1 = € 0.8832)

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Report by Mathieu Rosemain; Editing by Lisa Shumaker

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