Neobanking consolidation begins: French🇫🇷 Qonto buys German competitor Penta🇩🇪; Visa should acquire Airwallex. 3 reasons why it makes sense 📝; InsurTechs are struggling & what's next 👀
Good Morning FinTech, 25 July
Good day Everyone,
And happy Monday! Today’s issue is super hot and super interesting. We’re going to look at the beginning of neobanking consolidation as French🇫🇷 Qonto buys German competitor Penta🇩🇪 (& why it’s part of the three key things we’re going to see in the challenger banking space this and next year), why Visa should acquire Airwallex (3 reasons why it makes a ton of sense), and InsurTechs that are struggling globally (they will have to start doing more with less). Let’s jump straight into the awesome stuff:
Neobanking consolidation begins: French🇫🇷 Qonto buys German competitor Penta🇩🇪
The (breaking) deal 🤝 French neobank Qonto is set to acquire a German rival Penta. The deal is expected to close within the next few weeks.
The companies did not disclose how much the acquisition was worth, but German media reported that the price was in the “mid-three-digit million range.”
The match 👉 Let’s take a brief look at both companies’ USPs and how they match:
Qonto 🇫🇷:
Founded in 2016 and launched in 2017, Paris-based Qonto has 250,000+ clients across 4 markets (France, Germany, Italy, and Spain).
It focuses on helping SMEs and freelancers with banking, invoicing, book-keeping, and spend management.
Qonto has raised €622M from investors including Tencent, DST Global, and Tiger Global, among others. The FinTech was valued at €4.4B at its last funding round — a €486M raise in January this year, which was at the time France’s biggest ever FinTech fundraise.
In 2021, Germany was Qonto’s fastest-growing market, seeing 170% year-on-year growth.
Penta🇩🇪:
Founded in 2017, Berlin-based Penta serves mainly SMEs.
Penta has raised at least €80M from investors including Finleap, HV Capital, and RTP Global, among others. Their valuation wasn’t disclosed but in February the FinTech was speaking with potential investors seeking a valuation of between $453M and $567M (that clearly didn’t materialize).
It has 50,000+ customers in Germany and 200 employees.
From Differentiation to Consolidation👇🏼
This move is a logical next step for Qonto and marks the beginning of the neobanking consolidation in Europe. Also, it’s part of the three key things we’re going to see in the challenger banking space this and next year.
Here’s the takeaway: