Qonto Reaches 600,000 Customers & Pursues Banking License

Qonto's Pursuit of a Banking License in France

The question of “Is Qonto a real bank?” frequently appears in Google searches concerning the French fintech company. Currently, the answer is no, however, this situation may evolve as Qonto has officially applied for a banking license within France, as revealed by CEO Alexandre Prot.

Current Operations and Future Aspirations

Qonto presently serves European freelancers and small to medium-sized businesses (SMBs) utilizing a payment institution license acquired in 2018. This license already facilitated the introduction of a buy now, pay later (BNPL) service. Securing a credit institution license would broaden the scope of services offered to include lending, savings, and investment opportunities.

Having already expanded into multiple European markets thanks to its existing EU-wide license, Qonto has surpassed 600,000 customers. However, the absence of a credit license presents an obstacle to achieving its ambition of reaching 2 million customers by 2030.

Competitive Landscape and Strategic Timing

While expanding service offerings aligns with competing against traditional banks, obtaining a license and initiating credit services is a complex undertaking. This explains the varied approaches taken by Qonto’s fintech competitors.

Memo Bank was established as a fully-fledged bank from its inception, offering lending to SMBs. Finom operates under an electronic money institution (EMI) license and has recently begun testing lending capabilities. Revolut possesses a Lithuanian license but has yet to extend credit options to businesses, despite plans to do so this year.

The aggressive expansion and funding of competitors, particularly Revolut’s announcement of seeking a French license and establishing Paris as its Western Europe headquarters, may have prompted Qonto to accelerate its plans.

Profitability and Financial Position

Prot emphasized that Qonto’s decision was driven by achieving profitability ahead of schedule in 2023. This profitability allows Qonto to pursue the license without immediately needing additional fundraising.

The company has already secured $552 million in funding in 2022, achieving a $5 billion valuation. Prot indicated that future capital raises would likely be tied to significant mergers and acquisitions (M&A) deals.

Growth Through Acquisition and Integrated Solutions

Over the past eight years, Qonto has completed two acquisitions: Penta, a German competitor, in 2022, and Regate, an accounting and financial automation platform, in 2024.

These acquisitions reflect Qonto’s strategy of evolving beyond traditional banking to become a comprehensive financial management solution, incorporating tools for invoicing and bookkeeping.

Market Expansion and Customer Base

This integrated approach has fueled growth within the B2B sector across Europe. While Prot did not provide a detailed breakdown, he confirmed that Germany is now Qonto’s largest market, surpassing France. Spain and Italy follow, with recent expansions into Austria, Belgium, the Netherlands, and Portugal.

Demand for Credit and Existing Services

Qonto anticipates that some potential customers will only choose their services if they operate as a credit institution, due to the enhanced deposit guarantees and the availability of credit options.

The demand for credit has been validated by the success of Qonto’s Pay Later service, launched in 2024, which has already facilitated €50 million (approximately $59 million) in financing. However, the current license limits both the amount Qonto can lend and the loan duration to 12 months.

Strategic Partnerships and Future Revenue Streams

To provide customers with access to a wider range of loan products, Qonto has established a “financing hub” with third-party fintech partners, including Defacto, Karmen, RiverBank, and Silvr. Prot intends to maintain this hub for the foreseeable future.

Becoming a credit institution would unlock new revenue streams for Qonto, stemming from both credit margins and increased deposits available for lending. Revenue increased by 30% in the last year, though specific figures were not disclosed.

Focus on Independence and Product Development

Prot clarified that increased revenue isn’t the primary motivation. Qonto also aims to reduce reliance on external partners and accelerate product development. This is exemplified by the recent development of an in-house card processor to improve acceptance rates.

Team Expansion and Long-Term Vision

With a team of 1,600 employees, Qonto believes it now has the capacity to focus on new product initiatives, such as the AI-powered “Qonto Intelligence” layer, while simultaneously strengthening its banking infrastructure and risk management capabilities.

These efforts are designed to demonstrate readiness to France’s banking supervisor, with whom Qonto plans to collaborate closely throughout the licensing process. While the process may take several years, it represents a significant step in Qonto’s overall growth and maturity, evidenced by recent additions to its board of directors. These developments could also pave the way for a future initial public offering (IPO), though this remains a long-term objective.

Note: This story’s headline was changed to clarify that Qonto is not yet a bank.