“Is Qonto a real bank?” is one of the top suggested questions in Google searches about the French fintech startup. The answer is no, but it could change: Qonto has filed for a banking license in France, CEO Alexandre Prot revealed.
Qonto, which targets European freelancers and SMBs, currently operates with a payment institution license it obtained in 2018, and which already enabled it to introduce a form of buy now, pay later (BNPL). But a credit institution license would let it offer broader lending, savings, and investment options to its target customers.
Since its current license is valid across the EU, Qonto has already been able to expand into several European markets, and recently reached the milestone of 600,000 customers. But lacking a credit license is a hindrance for its goal to reach 2 million customers by 2030.
While offering a more comprehensive solution seems like a natural move to compete with incumbent banks, obtaining a license and rolling out credit is not easy. That explains why Qonto’s SMB fintech competitors have approached this issue in different ways, and why Qonto isn’t exactly playing catch-up.
Memo Bank was founded as a bank from the outset, and offers lending to SMBs, but that makes it an outlier. Finom operates with an electronic money institution (EMI) license, but it only just started testing the kind of lending that this regulatory middle ground allows. Revolut has a full Lithuanian license, but other than BNPL, it has yet to roll out credit options to businesses — although it plans to do so this year.
Still, the marketing power of well-funded competitors that operate both in B2C and B2B may have been a sign that Qonto needed to accelerate, especially as Revolut recently loudly announced plans to seek a French license and turn Paris into its Western Europe HQ.
Not mentioning competitors, Prot said that Qonto’s timing was driven by “having achieved profitability ahead of schedule in 2023.”
Techcrunch event Save $450 on your TechCrunch All Stage pass Build smarter. Scale faster. Connect deeper. Join visionaries from Precursor Ventures, NEA, Index Ventures, Underscore VC, and beyond for a day packed with strategies, workshops, and meaningful connections. Save $450 on your TechCrunch All Stage pass Build smarter. Scale faster. Connect deeper. Join visionaries from Precursor Ventures, NEA, Index Ventures, Underscore VC, and beyond for a day packed with strategies, workshops, and meaningful connections. Boston, MA | REGISTER NOW
The son of former BNP Paribas President Baudouin Prot, Qonto’s CEO had obviously already thought about pursuing a credit license — and that’s not just a guess. During a press briefing, Prot confirmed that he and co-founder Steve Anavi seriously considered the idea at one point, but ultimately dismissed it because it would have required too much time and additional fundraising.
Having been profitable since 2023 means that this hurdle now won’t require Qonto to raise more funding than the $552 million it secured in 2022 at a $5 billion valuation. Prot recently said that “the main, or the only reason, why we could raise additional capital is if we do a large or very large M&A deal, paid mostly in cash.”
... continue reading