“Is Qonto an actual financial institution?” is among the high advised questions in Google searches in regards to the French fintech startup. The reply is not any, but it surely might change: Qonto has filed for a banking license in France, CEO Alexandre Prot revealed.

Qonto, which targets European freelancers and SMBs, at the moment operates with a cost establishment license it obtained in 2018, and which already enabled it to introduce a form of buy now, pay later (BNPL). However a credit score establishment license would let it provide broader lending, financial savings, and funding choices to its goal clients.

Since its present license is legitimate throughout the EU, Qonto has already been in a position to increase into a number of European markets, and lately reached the milestone of 600,000 clients. However missing a credit score license is a hindrance for its objective to achieve 2 million clients by 2030.

Whereas providing a extra complete answer looks as if a pure transfer to compete with incumbent banks, acquiring a license and rolling out credit score shouldn’t be straightforward. That explains why Qonto’s SMB fintech rivals have approached this situation in several methods, and why Qonto isn’t precisely taking part in catch-up. 

Memo Financial institution was founded as a bank from the outset, and gives lending to SMBs, however that makes it an outlier. Finom operates with an electronic money institution (EMI) license, but it surely solely simply began testing the sort of lending that this regulatory center floor permits. Revolut has a full Lithuanian license, however apart from BNPL, it has but to roll out credit score choices to companies — though it plans to do so this year.

Nonetheless, the advertising energy of well-funded rivals that function each in B2C and B2B might have been an indication that Qonto wanted to speed up, particularly as Revolut lately loudly introduced plans to hunt a French license and turn Paris into its Western Europe HQ. 

Not mentioning rivals, Prot stated that Qonto’s timing was pushed by “having achieved profitability forward of schedule in 2023.” 

The son of former BNP Paribas President Baudouin Prot, Qonto’s CEO had clearly already thought of pursuing a credit score license — and that’s not only a guess. Throughout a press briefing, Prot confirmed that he and co-founder Steve Anavi significantly thought-about the thought at one level, however in the end dismissed it as a result of it might have required an excessive amount of time and extra fundraising.

Having been worthwhile since 2023 signifies that this hurdle now received’t require Qonto to boost extra funding than the $552 million it secured in 2022 at a $5 billion valuation. Prot recently said that “the principle, or the one motive, why we might elevate further capital is that if we do a big or very giant M&A deal, paid largely in money.” 

In its eight years of existence, Qonto has made two acquisitions: It took over its German competitor Penta in 2022, and it purchased accounting and monetary automation platform Regate in 2024.

The latter is a mirrored image of Qonto’s positioning past banking and as an built-in finance administration answer, with an providing that additionally contains instruments for invoicing and bookkeeping.

This method helped it develop within the B2B phase throughout Europe. Prot declined to offer a full breakdown of its 600,000 clients, however he stated that Germany is now Qonto’s largest market after France. In unspecified order, Spain and Italy come subsequent, adopted by the markets it entered in late 2024: Austria, Belgium, the Netherlands, and Portugal.

Nonetheless, Prot operates underneath the belief that some clients received’t select Qonto until it’s a credit score establishment. That’s as a result of this could grant them further ensures on their deposits, and since they need credit score to be an choice in the event that they ever want it, which some already do.

Qonto validated that demand for credit score with its Pay Later service; launched in 2024, it has already facilitated €50 million in financing, in response to the corporate (roughly $59 million). However the provide is proscribed by its present license — each for Qonto, which may solely lend from its personal fairness, and for its clients, who can’t borrow for longer than 12 months.

To assist its clients entry different kinds of loans, Qonto additionally put collectively a “financing hub” with third-party fintech companions together with Defacto, Karmen, Riverbank, and Silvr. Prot stated Qonto plans to maintain it for at the very least just a few extra years. And a few of these choices are extra particular than what the corporate might wish to get into.

Nonetheless, turning into a credit score establishment in its personal proper would unlock new income for Qonto, each from the margin on credit and extra upside from deposits, which it might be capable to use for lending. Prot declined to reveal income figures however stated that income elevated by 30% within the final 12 months.

Nevertheless, Prot stated that this extra income wasn’t the principle issue at play. Buying new clients apart, Qonto additionally sees this as a chance to rely much less on others and launch new merchandise quicker. In the identical vein, it lately constructed an in-house card processor to extend acceptance charges whereas lowering its reliance on third events.

With a staff of 1,600 folks, Qonto now hopes that it’s going to have the bandwidth to work on new product developments, such because the AI-enabled “Qonto Intelligence” layer, whereas additionally enhancing its banking infrastructure and threat administration groups.

The latter can also be aimed to show its readiness to France’s banking supervisor, with which it plans to work carefully to acquire its license. The method should take years, however it’s also a part of a broader “rising up” effort for Qonto, which lately added a number of senior profiles to its board of administrators. These steps might additionally assist lay the groundwork for a future IPO, although that continues to be a longer-term prospect.