Fintech unicorn Qonto, one of France’s fastest-growing startups in the sector, is expanding to four new European markets (Austria, Belgium, the Netherlands and Portugal), doubling the number of countries it has a presence in, the company is announcing today.
The neobank, which provides online banking services for SMBs and freelancers, is already present in France, Germany, Italy and Spain.
The move increases Qonto’s addressable market by 4m SMBs, in addition to 13m across its current markets, the company says. The fintech currently serves 500k customers.
In recent months, the company has been keenly looking at opportunities to acquire competitors, and it plans to continue doing so in its new markets.
“We see ourselves as a potential consolidator in the segment of finance management for SMBs in Europe,” cofounder Alexandre Prot tells Sifted.
“Our playing field used to be the four large markets that we’ve been in for five years now. It now also includes these four new countries.”
Qonto eyes M&A
Qonto is launching its product in all four markets but isn’t opening any new offices just yet. Prot says that physical locations will open in 2025 depending on the first results of the expansion.
“Given the size of these new markets and the fact we have just launched, most of our activity will remain in France, Germany, Italy and Spain,” he says.
The fintech will partly be looking at ways to expand its footprint in the new and existing markets via M&A.
“In our eight markets, we will remain interested in potential targets for acquisitions, whether to reinforce our client or technology base, or to add a product that can reinforce our offer,” says Prot.
So far Qonto has acquired two companies. In 2022, two years after launching in Germany, the neobank bought German competitor Penta — and took over the startup’s 50k customers in the country.
This year, Qonto acquired accounting fintech Regate, which enabled the company to expand the suite of products it has on offer and to attract a new class of customers: accountants and accounting firms.
Cash in the bank
The French unicorn last raised a €486m Series D in 2022 from investors including DST Global and Tiger Global.
Two sources with knowledge of the company’s financials previously told Sifted that the fintech’s annual turnover is in the range of several hundreds of millions of euros, which Qonto declined to confirm. The neobank plans to be profitable in 2025, which Prot says is “on good track”.
“We still have a large part of the cash we raised,” says Prot, “and in not so long our level of cash will start growing.
“So, not only do we not have cash problems but we have a lot of money that we can deploy for recruitment, marketing and M&A.”
The road to IPO
Prot says that the objective is now to double Qonto’s customer base to serve 1m enterprises by 2026.
Once that size is reached, the neobank might consider a public listing, he says.
“It’s not the priority in the short-term,” says Prot. “The company is relatively young and we still need to develop. But of course, it’s something we are considering doing in the next few years.
“It would mean we have grown well — but it means that first, we must grow.”
An IPO is not the only option on the table. Prot points to Revolut’s $45bn valuation or Stripe’s reported $70bn valuation: “There are no limits for leading tech companies that are developing well even if they stay private, especially if they are profitable,” he says.
“It will depend on the market, but we are in no rush.”
Read the orginal article: https://sifted.eu/articles/qonto-expansion-europe/
