Fintech: €100 million dedicated to financial startups
After health, the environment, and deeptech, Bpifrance is strengthening its investment capacity in fintech startups by dedicating €100 million to them.
The results are positive, despite an atypical year. In 2020, French Fintechs proved their resilience by raising nearly €830 million, according to the annual France Fintech barometer. This is because recent technological and regulatory developments have generated profound upheavals in the financial services ecosystem.
These new players seem to have succeeded in transforming customer relationships, automating management infrastructures, and enriching the predictive models of banks, insurers, and asset managers. Symbols of this dynamism are a few record-breaking fundraisings, such as that of the mobile payment solution Lydia, which has completed two rounds of financing for a total amount of 112 million euros. Overall, the sector is experiencing strong growth in France, where since 2012, the amounts invested have increased by an average of 74% per year.
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Historical trends call for historical solutions. Already boasting a portfolio of twelve Fintechs, Bpifrance is stepping up its equity support for companies in the sector by allocating €100 million via its Digital Venture and Large Venture funds. This amount will support French entrepreneurs with ambitious projects (banking services, insurance, blockchain projects, risk management...) whether they target financial institutions, businesses, or individuals.
"Through its positioning, as a manager of investment funds specializing in innovation, on the one hand, and thanks to privileged access to a network of business experts, within the Group, who have in-depth knowledge of the financial and banking industries, on the other, Bpifrance has a role to play in the growth of French Fintechs in order to enable them to position themselves among the leaders in this sector," says Arnaud Caudoux, Deputy Chief Executive Officer of Bpifrance.
In 2020, five new investments were made in the sector by the Digital Venture and Large Venture funds. Pixpay, Memo Bank, Swan, Ibanfirst, and Swile. The Digital Venture fund also announced on January 20 that it was supporting the fundraising of the Fintech SIS ID, a collaborative solution for combating money transfer fraud in France.
With an investment capacity of €700 million, the Digital Venture fund invests from seed to Series B, on grounds ranging from €1 to €25 million (tickets from €0.2 million to €10 million) in startups with strong growth potential, based on innovative technologies or products or deploying innovative services or business models.
Since 2011, the fund has invested in more than 90 digital companies to accelerate their development and help them take a leading position in their French market and internationally, including several Fintechs, such as Garantme, Famoco, Acinq, or CaptainContrat.
The Large Venture fund, with a capacity of €1.75 billion, invests more than €10 million in multi-sector deals worth more than €20 million. Since 2013, its team has invested in some 50 companies, including Younited Credit, Swile, Ibanfirst, and Payfit.