© Presse-citron
736 million euros. This is the total amount of fundraising carried out by French banking and insurance start-ups, the professional association France FinTech and Bpifrance announced this Tuesday. This is almost four times less than the 2.9 billion raised in 2022.
In a “heckled” environment fintech is suffering the effects of“strong downward pressure on funding” indicates the press release. A trend confirmed by Marc Simoncini, founder of Angell Bike, who told us during the presentation of the first Angell x Mini bike, that investors were particularly cautious, even more so when it comes to industry.
Although banking and insurance are far from this sector, they are still suffering the effects of a complicated macroeconomic situation. This dynamic was already palpable in 2022: during the second half of the year, only a quarter of the year's fundraising was carried out.
So far so good
Despite this drop in investment, fintech start-ups are doing well. This downtime even turns out to be beneficial: they are not laying off people and are more profitable than ever. A third of them are, compared to 28% in 2022. 53% of them achieve more than one million euros in turnover, compared to 36% in 2022.
“French fintechs were lucky to have a lot of funding quite late in the previous very aggressive cycle” confides Cyril Chiche, co-founder and president of Lydia, at Tech & CoBusiness. Many companies have raised a lot of money in large start-ups between 2021 and 2022. They therefore have cash to hold and support the projects..
The projects, in fact, focus more on “super banks”. Lydia, N26 or Revolut (to name a few) come out of their cocoon to come and rub shoulders with traditional banks.
All are preparing or have launched consumer credit offers, offer savings solutions and are preparing to deploy real estate loan offers. So many points which prevented customers from turning to neobanks to make them their main current account.
Remains that to continue to move forward, fintech start-ups will sooner or later have to find financing. If Revolut or Lydia have announced recruitment thanks to their previous fundraising, others are not so lucky. And to respond to the “rise in power of segments such as web3, insurtech, or impact finance” we will still need cash flow. It remains to be seen whether investors will be there again. For the moment, they are tightening their belts.
The 3 things to remember
- Fundraising by fintech start-ups collapsed in 2023
- However, this turning off the tap has positive effects on the sector
- But the projects of ’ future will require more cash