French fintechs no longer need to be ashamed of their market position. Although they still lag far behind American companies, both in terms of numbers and fund-raising, there have been some fine success stories in France, particularly in the payment, credit and factoring sectors.
The success of fintech in the payments sector
While French fintechs have not yet conquered all areas of finance, they have nonetheless captured 18% of payment revenues on the corporate side and 15% on the retail side. Fund-raising and technological developments are increasingly significant. 600 French fintechs raised €699 million in 2019, twice as much as in 2018. In just a few years, they have also created 10,000 direct jobs.
They have a strong presence in the payments sector. For example, Lydia, the mobile payment application, has raised 40 million euros from Tencent (WeChat). It has also expanded its offering to include insurance, instant loans and gift cards. It now has 3 million users in 5 different countries.
Other French fintechs have made a name for themselves in the payments sector, such as Leetchi, which has raised 220 million euros through its "cagnottes". Mangopay, which handles payments for 2,500 marketplaces, processed no less than 3.8 billion euros in transactions. In the same field as Mangopay, Lemonway raised €25 million and processed €2.5 billion in transactions in 2019. Firmly positioned in the banking market, it is soon to announce a partnership with a major bank.
Lunchr, which issues meal vouchers and provides employees with a card that can be used in 220,000 bakeries, supermarkets and restaurants, now has 3,000 corporate customers and 200,000 users. It has raised €30 million in 2019 and is preparing for international expansion.
Credit, crypto-assets, factoring: French fintechs expand in a variety of sectors
French fintechs don't just shine in the payments sector. Ledger, on the other hand, specializes in crypto-assets, i.e. digital assets using a computer network and based on "blockchain" technology, which enables transactions between multiple entities. This fintech has experienced phenomenal growth due to the spikes in cryptocurrency valuations. Ledger had raised €61 million in 2018 and achieved sales of €40 million.
In the consumer credit sector, Younited Credit broke even, with NBI up 65%. It generates around 30% of its margin from its credit-as-a-service offering under the Younited Business Solutions brand. In 2020, after Spain, it will launch a financial advisory service in the other European countries where it operates.
On the business credit side, October (formerly Lendis) is the fastest-growing company. It has lent €400 million to SMEs since its launch, including €129 million in 2019 alone. It is attracting institutional investors such as Bpifrance (the French public investment bank), the Italian caisse des dépôts, the European Investment Fund and soon the Spanish public bank. Thanks to the performance of its algorithms and the amount of data it has been collecting over the past four years, it will be working with banks as early as this year.
Finexkap, for its part, has made a name for itself in thefactoring sector and Alan in thehealth insurance sector. The latter raised 23 million euros in 2018 and 40 million in 2019.
All these fintechs have demonstrated their capacity for innovation, their technological performance and their ability to attract investors.