French fintech startup Qonto has raised €104 million ($115 million) in a Series C round of financing led by Chinese gaming and social giant Tencent, and Yuri Milner’s investment company DST Global.
The investment came only a few days after Tencent led a €40 million ($45 million) Series B round in Paris-based mobile financial services platform Lydia.
The new round was the largest investment in a French fintech firm, Qonto claimed in a Twitter post on Tuesday. The transaction brought the total capital raised by Qonto to €136 million ($151 million) since it was founded in April 2016.
Existing investors New York-based venture capital fund Valar Ventures, and early-stage investment firm Alven, also poured money into the round. Other investors include TransferWise co-founder Taavet Hinrikus, and Ingo Uytdehaage, CFO of global payment service Adyen, according to a statement.
Paris-based Qonto operates as a neobank, or a challenger bank, which offers financial services through a 100 per cent online and mobile current account, competing directory with longer-established banks which rely on traditional physical branch networks.
The company primarily provides a product that can help small and medium-sized enterprises (SMEs) and freelancers manage their company finances, covering payment services, bookkeeping, and team collaboration tools.
Since its public launch in July 2017, the company has attracted 65,000 SMEs in France, Italy, Spain and Germany. Transaction volume on the Qonto platform exceeded €10 billion ($11.09 billion) in 2019 with revenue quadrupling compared to 2018, as per the statement.
The Series C funding will allow Qonto to strengthen its presence in France while accelerating growth in the three new markets launched in 2019: Italy, Spain and Germany. The capital will help the startup grow business, attract new SMEs, and improve offerings including making more adaptations to local customer needs. It will also be used to grow the Qonto team from 200 to 300 within a year.
The company was granted a payment institution licence in June 2018. The funding will be “a key support in Qonto’s ambition” to attain its own credit institution licence by the end of 2020 and become a bank in order to offer new services to its customers, according to the statement.
Tencent, the Chinese tech behemoth best known for its messaging app WeChat, actively invests in companies in the technological innovation space around the world. It has caught 46 global unicorns including $55-billion Chinese ride-hailing giant Didi Chuxing and WeBank, a China-based digital banking provider valued at $20 billion – compared with 42 from Japan’s SoftBank Group, according to the first Hurun Global Unicorn List 2019.
The company also launched a 1.33 billion Norwegian crown ($148 million) bid for computer games maker Funcom this week.