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French fintech Qonto is talking to investors about a sale of existing shares that could value it at €5bn, the latest of such deals as companies seek to reward employees and early backers in the face of a weak market for listings.
The neobank has been exploring selling at least €200mn in stock held by employees and early investors and has held discussions with several funds, according to people familiar with the matter.
Qonto, already one of France’s most valuable technology companies, is seeking a valuation of about €5bn, the people said. But they cautioned that no price had been set yet, and said it was unclear if any agreement would be reached.
Qonto was last valued at €4.4bn during a 2022 funding round in which it raised €486mn from investors including Tiger Global, TCV and Tencent. The company declined to comment on the latest share offering.
The sale would make Qonto the latest fintech company to turn to the secondary market at a time when exits for founders and investors are difficult because the IPO market remains tepid.
A successful deal would make Qonto one of the few European fintechs to increase their valuation in recent years after higher interest rates and shifting investor sentiment battered the sector, ending a period of hypergrowth that had pushed fundraising levels to a record in 2021.
Revolut, Europe’s largest tech company, in August closed a $500mn sale of employees shares, with its value growing from $33bn to $45bn. Other UK fintechs Monzo and GoCardless are also targeting similar deals.
David Sainteff, partner at Global Founders Capital, said several European fintechs were well-positioned for secondary sales because they had reached a more mature stage, had developed scale and lenders were benefiting from higher rates.
“Since 2021, many early employees have recognised that opportunities for liquidity events may be limited and IPOs postponed,” Sainteff said. “We’re likely to see more and more employee share sales at successful companies, as these firms will need to attract, retain and motivate top talent.”
Qonto was founded in 2016 by entrepreneurs Alexandre Prot and Steve Anavi with the aim of providing better financial services to other entrepreneurs.
It provides a suite of services including invoice management for more than 500,000 small and medium companies in France, Spain, Italy and Germany. The fintech does not have a banking licence but provides credit through partnerships with other institutions.
Qonto’s growth has been fuelled by entrepreneurs, sole traders and small companies, but it has in recent years sought to attract bigger clients, as well as offering software services.
The group has also embarked on a European expansion, announcing earlier this year that it would launch in Austria, Belgium, the Netherlands and Portugal.
https://www.ft.com/content/9c5905d8-50de-4e25-85ec-492435c5d09e
