In the first half of 2019, French finance startups raised €354 million through 39 deals, compared with €370 million over the whole of 2018. These figures, published by KPMG, show how keen investors are to invest in startups.
According to the report released by auditing and consulting firm, KMPG, on June 19, 39 fundraising operations were recorded in the first half of 2019. Although the number of deals did not increase dramatically compared with 2018, the average ticket per fundraising operation soared to 9.1 million euros over the first 6 months of the year.
Five fund-raisings in excess of 30 million euros
This increase in funding size was also observed by Klein Blue, which presented an analysis of fintech trends in France during a keynote session at the Fin&Tech Community. The study shows that nearly 1.7 billion euros have been raised since the birth of the fintech ecosystem in 2010. What explains this new financing record for French startups?
Five major fundraisings were completed in the first half of 2019:
- Wynd, the Paris-based start-up specializing in "unified commerce": 72 million euros ;
- Younited Credit, the online credit platform: 65 million euros ;
- Shift Technology, a start-up specializing in insurance fraud detection: €53 million;
- Alan, online health insurance for businesses and the self-employed: 40 million euros ;
- Lunchr, the startup that digitizes luncheon vouchers: 30 million euros.
These five fundraisings account for 73% of all deals completed in the first 6 months of the year. In 2018, only startup Ledger had completed such a substantial round, at €61 million. These significant rounds of financing have increased the average amount invested in fintechs to 9.1 million euros in the first half of 2019, compared with 5 million euros in the previous six months, according to the study published by KMPG.
A gap with the UK market
However, these fundraisings in excess of €30 million remain modest compared with those achieved by London startups. Indeed, in February 2019, OakNorth raised $440 million with Japanese giant SoftBank. This is the largest fundraising by a fintech in Europe. Fintech Checkout, which specializes in online payment solutions, raised a record $230 million. This discrepancy in funding size can be explained by the fact that British nuggets were created earlier, from 2012 onwards for the most part. By contrast, a large number of French startups like Alan were born in 2016.
No brake on Assurtech growth
In addition to this gap with UK fintechs, theFintech Horizon study shows that investment in the Assurtech sector is continuing unabated. The 120 Assurtechs surveyed raised €107 million in the first 5 months of the year, compared with €70 million over 2018. Two companies in particular stand out: Alan, which offers complementary healthcare for the self-employed and digital businesses, and Shift Technology, an anti-fraud artificial intelligence serving insurers. Other Assurtechs such as Luko, which now has 10,000 customers, Wilov and its 5,000 users, and Leocare are starting to make a name for themselves.
Alongside payment and financing activities and Assurtech, which respectively account for 54% and 13% of funds raised by the sector, Blockchain (5%) and Regtech (4%) are progressing more slowly, KPMG points out.
The growth in fund-raising in the Fintech sector bears witness to the maturity of the ecosystem. A real strengthening of financing for these companies is taking shape, enabling them to better deploy internationally, even though some of them, such as Younited Credit and Shift Technology, were already established abroad. According to Salim Echoucry, co-founder of KMPG, by the end of 2019, over 600 million euros could be invested in these companies with a disruptive approach to banking, finance and insurance.