The French community of Fintech startups gathered at the annual dinner of the France Fintech Association to review the achievements of the past year and celebrate the holiday season. Crowdfund Insider took the opportunity to ask leading executives in Fintech and alternative finance to take stock of the past year for their market and for their company.
Strong themes of international expansion, growth acceleration, bank/Fintech partnerships, and consolidation emerge.
Alain Clot, CEO of France Fintech, the association of French Fintech startups.
“The French Fintech ecosystem is doing well and is growing rapidly. The number of French Fintech startups exceeds 600, up 35% from last year. Their internationalization is sharply accelerating, with more than half operating in more than one country and three-quarter planning to expand internationally.
French Fintech startups can rely on an increasingly efficient national ecosystem. According to 2019 metrics, France is:
- The 2nd largest market in terms of venture capital raised by FinTech startups, with €700 million raised in 2019 (+ 84% from 2018).
- The top European network of incubators.
- The leader in number of AI labs and volume of investment dedicated to AI.
Four French Fintech startups are listed in KPMG’s ’Emerging 50’ of most innovative FinTechs.
The France Fintech Association supports FinTech startups in every aspect of their work, providing regulatory support, visibility, and community services to help renew finance and foster international champions.”
Geoffroy Guigou, co-founder and COO of international consumer lending marketplace Younited Credit and Member of the Board of France Fintech
“2019 has been a year of acceleration for Younited Credit, in terms of financing, technological development and internationalization. Following a public securitization operation carried out in June, Younited Credit became the first European Fintech to receive a double AAA rating from Moody’s and Standard & Poors. With this €156 million financing transaction Younited joined the exclusive club of European lending platforms able to issue on public debt markets.
The presence of three European insurance leaders as new lenders on our platform confirms the solidity of our economic model and our technological platform.
Regarding technology, the launch of our B2B offer “Younited Business Solutions” at the end of the year marked the conclusion of several years of work for our teams. Younited now enables leading European firms such as Bpifrance, N26, Free, Conte.it, and Pitagora, to accelerate the digitization of their financing activity.
Finally, the appointment of Kaï Friedrich in Munich to develop Younited in Germany was a strong signal in 2019 for Younited, which continues to accelerate internationally.
More generally, 2019 saw, in the context of DSP2, the emergence of a strong trend towards platformization and open banking (banking as a service, payment as a service, credit as a service, etc.). We are confident that this trend will continue in 2020. The ecosystem will see a multiplication of offerings and partnerships of this nature.”
Olivier Goy, Founder & CEO of international SME lending marketplace October and Member of the Board of France Fintech
“2019 has enabled October to strengthen its ambition.
In terms of geographic expansion, October’s first full year of operation in the Netherlands brought very promising results. We also opened Germany, with the recruitment of Thorsten Seeger, our German CEO.
In terms of institutional investment, we launched a new fund with a first tranche of €100 million from the European Investment Fund (FEI), alongside other leading institutional investors including CNP Assurances and Bpifrance.
Our base of individual lenders is growing by the day, the platform now has a community of more than 60,000 members.
Finally, at the dawn of its 5th birthday, October had the pleasure of joining the ’Next40’ ranking, a selection made by the French government of 40 French startups with high potential.”
Jérémie Benmoussa, co-founder and Chairman of the real estate crowdfunding platform Fundimmo and President of the French Crowdfunding Association.
“In 2019, the French real estate crowdfunding market sustained the average 30%+ growth of the past few years and collected more than €330 million in financing. Fundimmo consolidated its position among leaders by raising nearly €35 million for 55 projects, while maintaining zero default and paying out €13 million in reimbursements over the period.
More generally, the real estate crowdfunding sector benefited in 2019 from a favorable regulatory environment. Since November, platforms can raise up to €8 million per project, instead of €2.5 million before. This enables them to finance larger developers and larger projects. Individual investors can now place the bonds they subscribe in a PEA-PME tax wrapper which gives them a tax exemption after 5 years.
2019 also saw leading institutional investors and real estate firms enter the real estate crowdfunding market. Fundimmo, for example, announced in July that real estate investment firm Foncière Atland has taken a majority stake in its capital.”
Caroline Lamaud, Chairwoman of equity crowdfunding platform Anaxago and Member of the Board of France Fintech
“The year 2019 has been particularly fruitful for French Fintechs, with more than 600 French Fintechs identified, nearly €700 million raised, double the amount raised in 2018, and an average amount raised of €11 million, also doubled. The sector continues its exponential growth. It now counts two unicorns and several more are on their way to become one!
For Anaxago, the year 2019 was a year of marked acceleration of capital inflows with nearly €75 million raised via the platform. We successfully launched our first diversified fund, which is already 95% invested. The platform was able to return more than €26 million to investors this year, for an average IRR of 9.5%. In 2020, we will continue to advance our diversification in view of a formal transition from an equity crowdfunding platform to a neo-private bank.”
Thomas de Bourayne, Founder and CEO of SME lending platform Credit.fr
“We are witnessing a market concentration around a few firms which are reaching a significant size.
These firms have in common the ability to raise large sums, to be backed by powerful financial groups, and to attract institutional investors in addition to retail investors.
These leaders diversify their business around four pillars:
- Financing VSEs & SMEs,
- Real estate crowdfunding,
- And, to a lesser extent, renewable energies.
This is Credit.fr’s strategy. We continue to make progress in the area of financing of VSEs/SMEs. Thanks to the acquisition of real estate crowdfunding platform Homunity at the beginning of the year, we made a remarkable entry into real estate crowdfunding. At the same time, we opened our first international presence in Switzerland via a joint venture with Vaudoise Assurance.
In total, Credit.fr and Homunity financed €100 million in France. In number of projects, we represent one third of the total number of projects financed in France via crowdlending platforms.”
Damien Guermonprez, Executive Chairman at Pan-European payment firm Lemon Way
“2019 was a fantastic year for Lemon Way. We refocused the company on marketplaces: B2B, B2B, C2C, including, of course, financial marketplaces in alternative finance, crowdfunding, crowdlending, and invoice trading. We estimate the total size of this market in Europe at €1,000 billion 2029, including €408 billion for financial marketplaces.
We have raised €35 million in the past 12 months, which gives us the resources necessary to achieve our ambition.
We differentiate ourselves by partnering with banks to respond to the specific needs of marketplace clients. This positioning should allow us to accelerate in 2020 with the addition of 150 new marketplace customers through a banking partnership.”
Therese Torris, PhD, is a Senior Contributing Editor to Crowdfund Insider. She is an entrepreneur and consultant in eFinance and eCommerce based in Paris. She has covered crowdfunding and P2P lending since the early days when Zopa was created in the United Kingdom. She was a director of research and consulting at Gartner Group Europe, Senior VP at Forrester Research and Content VP at Twenga. She publishes a French personal finance blog, Le Blog Finance Pratique.