\Fintech Analysis/

22 French fintechs to watch post-Brexit

French politicians like to think Brexit will give Paris’ fintechs an advantage over London. Here are the startups to watch.

By Marie Mawad in Paris

Is Brexit going to give France’s fintechs the chance to finally outshine London’s?

French politicians sure seem to think so. Junior minister Cedric O told Sifted last month in an interview that the stars are aligned for Paris to overtake London as the European capital for fintechs. 

And while Paris at the moment is home to 1,200 fintechs, according to Dealroom data, and London to three times as many, there are signs including an acceleration in funding showing France is slowly catching up to neighbouring UK.

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“The financial sector is one where we can take advantage of Brexit,” says O. “We see the pace of fintech growth in France accelerating. The French quality of life and the quality of Paris as a finance hub are factors.”

Reality is more nuanced than politicians say. 

Investors agree France is seeing an acceleration on the European fintech scene. But many also argue that France’s best chances to shine aren’t at trying to catch up to London, but rather at focusing on specific untapped segments to spawn regional champions.

“We can keep torturing ourselves comparing Paris to London, or we can look at what’s really interesting on the French fintech stage.”

“We can keep torturing ourselves comparing Paris to London, or we can look at what’s really interesting on the French fintech stage,” says Elina Berrebi, founding partner at Gaia Capital Partners. 

Promising niches

Berrebi argues French startups need to focus their efforts on the kinds of particularly promising niches left unaddressed by traditional financial establishments. Niches that range from tailoring to small business owners and freelancers, to ecommerce customers, or teens.

David Sainteff, a partner in Paris for Berlin-based seed and growth investor Global Founders Capital, agrees. 

“In many respects banks missed the fork in the road leading to digital transformation,” says Sainteff. “That’s left blind spots in the market for pure players to go after and do better than traditional banks could.”

Up and comers can walk in the footsteps of neobank Qonto and its more than 120,000  business customers or Shine, another neobank for professionals which was taken over by Societe Generale in June for an undisclosed amount (TechCrunch reported it was around €100m).

French startup Treezor was snatched up by Societe Generale in 2018 for its white label “bank-as-a-service” software assets that let clients implement banking and payments services more easily. Others (Swan, Fintecture) are now walking in its tracks.

“Prosumer” leader

“With the successes of Qonto or Shine, France is emerging as a ‘prosumer’ leader,” says Hadrien Comte, an associate at Gaia Capital Partners.

“Prosumers”, as opposed to consumers, are professionals, or business clients. It’s generally less costly to woo and keep them than the general public, which is attractive to investors, says Comte.

But there are consumer niches worth pursuing too, like: teen banking (Kard, Pixpay), deferred payments or cashback for ecommerce (Alma, Joko), mobile payments (Lydia), and microcredit (Finfrog).

Brexit opportunity

So what does Brexit change in all of this?

“Of course Brexit is an opportunity for continental Europe, because it’s going to generate more friction to do business in London,” says Gaia Capital Partners partner Berrebi. “It’s not what matters most in our analysis —fundamentals, business, execution are still what matters most— but it helps.”

It could also potentially serve as an accelerator for French fintechs, if they’re able to expand faster to the rest of Europe at a time when UK startups are bogged down by coping with Brexit.

“Who will be able to expand to the rest of Europe, outside their home market, and figure out all the different regulations and banking logics?”

“Who will be able to expand to the rest of Europe, outside their home market, and figure out all the different regulations and banking logics?”, asks Global Founders Capital’s Sainteff. “The French ecosystem has come a long way, and even if a lot of fintechs are still early stage, they’re starting to be really solid. The next step is scaling.”

Gaia Capital Partners’ Comte also points out that continental Europe has an overall friendly regulatory environment for fintechs, which has been opening up the banking market to new players in recent years with policy changes.

Top fintechs to watch in France

We asked entrepreneurs and investors in Paris, from the big banks to startups campus Station F, who are the French fintechs to watch amid Brexit. Here’s a curated list highlighting their most interesting suggestions, and Sifted’s own picks, in no particular order.

  • Epsor. New generation retirement savings platform.
  • Joko. The cashback app gives users points and rewards for the money they spend. It’s based at Station F.
  • Pennylane. Technology-augmented accounting services.
  • Alma. Buy now and pay in several instalments service for online purchases. 
  • Qonto. Neobank for businesses.
  • Luko. Home insurance, all-digital.
  • Lydia. Mobile payments app, with a feature that lets you send money directly to a friend’s mobile phone. Tencent led the startup’s last fundraising, in January this year, for €40m.
  • Mansa. Loans for freelancers.
  • Pixpay. Banking targeted at Generation Z. Sifted wrote about it as part of a broader Gen Z story.
  • Georges. Automated accounting software platform for freelancers.
  • Upflow. Helps small businesses manage the issue of customers who don’t pay their bills.
  • Dreamquark. Artificial intelligence for financial services.
  • Fintecture. Provides software that makes it easier for companies to include banking service including payments in their day to day business. It’s based at Station F.
  • Finfrog. Microcredits for consumers in less than 24 hours, online.
  • Swan. Part of the “banking-as-a-service trend”. Offers white label banking features.
  • Kard. Neobank for teenagers, with the parents running the bank account. Sifted wrote about it as part of our story about banking for teens.
  • Younited Credit. One of France’s earlier online lending platforms. 
  • October. Loans offerings geared towards small and medium businesses.
  • Memo Bank. Formerly known as Margo Bank. Online banking for professionals.
  • Agicap. Cash flow management software for small businesses. Not strictly fintech, but rather fintech-adjacent.
  • Libeo. Another cash flow management tool.
  • Turgo. Microcredit platform. It’s based at Station F.

Marie Mawad is Sifted’s French correspondent. She also covers AI, and tweets from @Marie_a_Paris

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Alexander Klein
Alexander Klein

Great post! eCrowdFundr is an effective crowdfunding platform for individuals and companies looking to build and operate their own Fintech projects.

Svetlana
Svetlana

Very insightful post, thank you!