The record-breaking year can be attributed to one exceptionally large deal
- In the first three quarters of 2018 French FinTech companies have raised $522.6m across 21 deals. Total amount invested has been increasing since 2014 and this year has seen the biggest yearly jump in capital raised. This can be explained in part by the biggest deal in 2018 in which October, previously known as Lendix, raised $245m in debt financing. The company’s platform enables SMEs in France, Spain, Italy and the Netherlands to borrow directly from individual and institutional lenders. This deal makes up 46.9% of the total raised so far this year.
- However, even excluding this deal, the value invested in the first three quarters of 2018 is higher than any other year’s total. The previously mentioned Lendix deal is the only funding round this year which raised more than $75m. However the concentration of capital into later-stage is high and the top 10 deals this year make up 90.3% of capital raised.
- The second largest deal this year was $75m raised by Ledger. The company offers security and infrastructure solutions for cryptocurrency and blockchain applications. The CEO Eric Larcheveque announced, “These funds will be used to keep investing significantly in R&D while scaling our operations and deploying our teams globally.”
- Deal activity, which has so far reached 21, is on track to decline slightly compared to last year.
Total value invested in French FinTech companies last quarter exceeded $50m
- The last quarter saw $55.3m invested across 6 deals. This is only 53.6% of the total capital raised in the corresponding quarter last year. In fact, Q3 2018 is currently the weakest quarter this year and makes up only 10% of the total value invested so far in 2018.
- The biggest deal in the third quarter, which makes up 42% of total value invested, was a $23m Series B round raised by Qonto. The Paris-based company offers a digital mobile checking account for small companies and freelancers. Qonto plans to double its number of employees and build its own payment infrastructure.
- The first quarter in 2018 has seen the most capital raised, $383.1m, which makes up 73.3% of the total amount invested this year. This is due to the two biggest and previously mentioned deals with Lendix and Ledger which together account for $320m of investment in the first three months of 2018.
- Deal activity in Q3 2018 has dropped by a third compared with the same quarter last year.
Companies in the Payments & Remittances sector are responsible for almost a quarter of all deals since 2014
- The Payments & Remittances sector has completed the highest share of FinTech deal activity (23%) in the past four years in France. The largest deal in the sector so far this year was $16.1m raised by Lydia. The company’s P2P payments app is used by 1.5m European users and they are now launching insurance for mobiles.
- Companies in the second most popular sector, WealthTech, have attracted 21 deals since 2014. The largest funding round in 2018 was the previously mentioned Quonto deal. The largest ever deal was $24m raised by Linxo. The company provides a web based personal financial management service to help customers manage and optimise their assets. The funding round was backed by three companies including financial institutions Credit Agricole and Crédit Mutuel Arkéa.
- The Infrastructure & Enterprise Software, InsurTech, Marketplace Lending and Data & Analytics subsectors each received a healthy proportion of deals; 12%, 10%, 9% and 9%, respectively.
- The ‘Other’ category is comprised of the Cryptocurrencies, Institutional Investments & Trading, Real Estate and RegTech sectors. The largest funding round in this category was the previously mentioned deal with Ledger. The second largest deal was $28m raised by Shift Technology in a Series B round. The RegTech company provides insurance businesses with an innovative SaaS solution which uses AI and big data to improve and scale fraud detection. The company has now dealt with more than 100 million claims and with the new funding looks to open offices in New York and Tokyo.
The most active investors in French FinTech companies have completed over 60 deals
- Since 2014 the top investors in France’s FinTech space have taken part in 61 deals. Eight of the nine most active investors are companies based in France. These French investors include insurance companies, banks and venture capital firms.
- The most active investor, Bpifrance, has taken part in 12 funding rounds in the last four years. The French public investment bank participated in a $47.8m Series D round raised by Younited Credit in September last year. The company is building a crowdlending platform and is offering its services to consumers in France, Spain and Italy.
- The only non-French top investor is London-based Iron Capital with five completed transactions. The venture capital firm is dedicated to early stage start-ups. Last year, it took part in a $6.8m funding round raised by Foxintelligence, an analytics company for e-commerce trends.
The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2018 FinTech Global