French B2B fintech Qonto reaches 600,000 customers, files for banking license

The question on many minds—"Is Qonto a real bank?"—is answered with a firm no, for now. However, that could soon change as CEO Alexandre Prot announced that the French fintech startup has filed for a banking license in France. Targeting European freelancers and small to medium-sized businesses (SMBs), Qonto has operated under a payment institution license since 2018, which allowed it to introduce buy now, pay later (BNPL) services. Securing a credit institution license would empower Qonto to offer a wider range of lending, savings, and investment options, crucial for achieving its ambitious goal of attracting 2 million customers by 2030. Currently, Qonto's existing license facilitates its operations across the EU, helping it to expand into various European markets, recently culminating in a significant milestone of 600,000 customers. However, the absence of a credit license hampers its growth potential. In a competitive landscape, Qonto is not alone in its aspirations. Memo Bank was established as a bank from the outset, providing lending services to SMBs, while Finom operates with an electronic money institution license and is just beginning to explore lending options. Meanwhile, Revolut holds a full Lithuanian license but has not yet expanded its credit offerings beyond BNPL, despite plans to do so this year. Qonto’s competitors, especially well-funded ones, are a constant reminder of the urgency to evolve. Prot pointed out that Qonto's decision to file for the banking license is not a reaction to its rivals, but rather a strategic move spurred by the company's profitability achieved earlier than expected in 2023. The CEO, whose background includes being the son of former BNP Paribas President Baudouin Prot, has long considered applying for a credit license. Initially dismissed due to time constraints and fundraising needs, the recent profitability means Qonto can now consider this crucial step without seeking additional funding beyond the $552 million raised in 2022. Having grown through acquisitions—including German competitor Penta in 2022 and the accounting platform Regate in 2024—Qonto aims to establish itself as a comprehensive financial management solution. This strategy has enabled it to thrive within the B2B segment across Europe. Although Prot refrained from disclosing specific customer demographics, he noted that Germany has emerged as Qonto’s largest market after France, followed by Spain and Italy, and new entries like Austria and Belgium. Despite this growth, Prot acknowledges that some potential customers may be hesitant to choose Qonto until it becomes a credit institution. Such a status would provide additional security for their deposits and open up credit options, a demand already validated by Qonto’s Pay Later service, which has facilitated €50 million in financing since its launch in 2024. To enhance customer financing options, Qonto has established a “financing hub” with partnerships from third-party fintech firms. While this service is meant to be temporary, the long-term vision remains focused on obtaining a full banking license, which would unlock new revenue streams and allow for faster product launches. With a growing team of 1,600, Qonto is also investing in infrastructure improvements, including an in-house card processor to boost acceptance rates and lessen reliance on third parties. The company plans to work closely with France’s banking supervisor as it seeks to navigate the licensing process, which could take years. This endeavor is part of a broader strategy for growth, positioning Qonto for potential future developments, including an IPO, albeit as a longer-term aspiration.