Where is French fintech? According The year of Fintech 2024 published by the Fintech Observatory, under the effect of the slowdown that began in 2022 and is confirmed in 2023, venture capital investment in European fintech companies continues to fall, with a drop of almost a quarter in the number of offers in 2024.
However, the amounts raised by fintech companies increased by 8%, going from 5.8 billion euros in 2023 to 6.3 billion euros in 2024. Less fintech financed but more funds injected, which allowed, according to siftedtwo French fintechs, Pigment and Pennylane, achieved unicorn status (more than $1 billion in valuation) last year (which happened to 13 European startups, including 4 French, up from 7 in 2023, but 47 in 2022 and 69 in 2021).
However, the notable monitoring and analysis work carried out by the Fintech Observatory allows us to go beyond this observation. In particular, we can easily compile a list of only twenty French fintechs that, for more than ten years, have capitalized more than 100 million euros thanks to their successive fundraising. However, you can count on the fingers of one hand those that directly offer their services to the general public:
- Clubfunding (financing/investment),
- Ledger (crypto),
- Léocare (insurance comparator),
- HealthVet (pets)
- and Younited (instant credits).
Almost all the others, among the twenty, operate in the professional and small and medium-sized business market (Qonto, Alan, Payfit, Swile, etc.).
However, for ten years now, France has no shortage of original startups, actors who have proven to be pioneers in the field of fintech. However, the funds raised will not have allowed them in most cases to establish themselves in the expensive consumer markets, nor to take on very well-endowed foreign fintechs that have quickly gained an international base such as Klarna or Revolut.
So has French fintech been lacking investors? This seems doubtful since, in all sectors of activity combined, the Observatory lists more than thirty. Furthermore, the commitment of the State must be taken into account, in particular through BPI France.
A strong concentration of investments
However, the average ticket intake for the fundraiser will have been particularly low. Without ever reaching 20 million euros in the last ten years (the highest amounts correspond to digital banking and insurtech, with 16 million euros). Of course, these are just bills. half. In fact, some fintechs have raised much more funds. But they are rare and, as we have seen, only twenty are currently capitalized at more than 100 million euros. Therefore, we can speak of a strong concentration of investments, although in most cases insufficient for public markets in general. Under these conditions, investors were not in favor of the emergence of an ecosystem that would have a knock-on effect on consumers.
Instead of aspiring to the formation of new markets, investors seem, very cautiously and not without a strong mimicry effect, to have reasoned “for a given market”: tickets to see, followed by others, rarely raised, if The market seemed to respond and the sails were quickly lowered in the event of a gust of wind. Of course we are exaggerating, but the numbers are there.
This approach may have been relatively relevant in the professional and SME market, where expectations were high and towards which banks and insurance companies, let’s face it, did not compete in creativity. There, new uses quickly took hold, particularly because the very diverse fintech offerings supported each other and contributed, together, to raising customer expectations. In the individual market, however, more significant means would have been needed to gain trust and change habits.
This is a missed opportunity because, when it comes to their own innovations, most French banks have taken the same cautious approach as investors. Therefore, as we highlighted in our previous column, France is today the red lantern of digital banking. So in France, neobanks that are not subsidiaries of traditional banks in France will not be French: N26, Bunq and especially Revolut control this market, and soon the individual market as a whole?
Source: BFM TV
