Swan Raises $44M Series B to Expand Embedded Banking

Swan Secures €42 Million in Second Close of Series B Funding

French technology company Swan has successfully raised an additional €42 million, equivalent to approximately $44 million based on current exchange rates. This funding represents the second portion of the company’s Series B investment, initially announced in September 2023.

Facilitating Embedded Finance Solutions

Swan specializes in enabling other businesses to integrate financial products into their platforms on a large scale. The company’s technology allows for the creation of both virtual and physical cards, compatible with popular mobile payment systems like Apple Pay and Google Pay.

These cards are fully customizable by Swan’s clients, allowing for programmatic configuration of spending limits and authorized merchant restrictions.

Comprehensive Payment Account Capabilities

Beyond card issuance, Swan provides the capability to establish payment accounts, each with a unique IBAN. These accounts support a wide range of financial transactions, including incoming and outgoing payments, as well as SEPA direct debits.

The funds within these accounts can then be directly utilized to power the associated payment cards.

Growing Client Base and Notable Partnerships

A number of rapidly expanding companies have selected Swan as their embedded banking partner. Pennylane, a French accounting startup that achieved unicorn status in the previous year, now provides accounts and payment cards to its user base, leveraging Swan’s infrastructure.

Indy, a comprehensive administrative solution for freelancers, also integrated Swan’s accounts and cards into its service offerings. Additional clients include Agicap, Factorial, Lucca, and Sesame.

Currently, Swan collaborates with 150 companies and processes an impressive €1.5 billion in monthly transaction volume.

Investment Details and Future Outlook

This second tranche of funding is led by Eight Roads Ventures, with participation from existing investors including Lakestar, Accel, Creandum, Hexa, and Bpifrance. Bpifrance initially invested in Swan during its seed funding round through its Digital Venture fund.

Lucile Cornet, a partner at Eight Roads Ventures, stated: “We believe the embedded finance opportunity is immense, and that banking services will increasingly be offered directly where users are, within existing software and workflows. We’ve known Nicolas and his team since their early days and have been consistently impressed by their rapid progress, Tier 1 customer base, and successful international expansion.”

Valuation and Core Banking System

Although the company has not publicly disclosed its current valuation, Swan’s co-founder and CEO, Nicolas Benady, confirmed to TechCrunch that it has increased. He noted, “We’re not a unicorn yet, so we don’t mention it.”

Unlike many fintech companies that rely on third-party APIs, Swan has developed its own proprietary core banking system. This allows the company to offer localized IBANs and integrate country-specific payment solutions.

Compliance and Expansion Plans

Swan’s services offer clients the benefit of managing financial transactions without directly handling funds. The company assumes responsibility for crucial compliance and KYC (know your customer) requirements.

With the capital from this funding round, Swan intends to continue its geographic expansion, with Italy identified as the next target market.