After a record-breaking 2019 in terms of fundraising, French fintech is still lagging behind Germany and the UK, but "catching up is underway", as Lior Derhy, managing partner at New Alpha, points out. In partnership with Exton Consulting, this management company has just published its 2020 map of French fintechs.
A record year for fundraising
In 2019, over 80 funds were raised by French fintechs, totaling more than €630 million. This is almost double the funds raised in 2018. The average ticket is rising to 35 million euros, the same level as in Germany. Mobile payment start-up Lydia, for example, raised €40 million.
According to Lior Derhy, until recently, fundraising in excess of 30 million euros did not exist in France. Now, in 2019, four French fintechs have raised more than €50 million, including Wynd, the financial flow management start-up, which raised €72 million. However, these amounts are still lower than in the UK or Germany. Across the Rhine, for example, where the neobank N26 was born, total fundraising in 2019 reached almost 1.5 billion euros.
The sector attracts international investors. Foreign Venture Capital funds have thus significantly increased their presence, leading two-thirds of fundraisings of €10 million or more in 2019, up from 20% in 2018.
New opportunities for French fintech
"France has never had so many FinTechs looking to revolutionize the financial services landscape. Many new players have appeared this year, not necessarily where we expected them, a sign of the agility of our entrepreneurs in identifying new opportunities", explains Nicolas Felgueiras, Director of Exton Consulting.
Among these new opportunities, the European PSD2 Directive has opened the door to a considerable boom in Banking as a Service (BaaS) offerings, which involve providing banking services to unlicensed players via the provision of APIs and the dissemination of financial data.
Financial institutions also have enormous needs in terms of compliance and customer knowledge solutions, which represents a strategic challenge for French fintech. The aggregation and enhancement of transactional banking data is also of interest to the financial industry as a whole.
The number of fintechs operating in France continues to rise. According to mapping carried out by New Alpha and Exton Consulting, there were 352 companies actually active at the end of 2019, compared with 320 in 2018 and 285 in 2017. According to Laurent Nizri, founder of the Paris Fintech Forum, competition in the sector is fierce, and only the leaders in each segment are likely to make a lasting impact.