Whereas many entrepreneurs are presently going through the cruel actuality of a VC funding crunch, Qonto isn’t one in every of them. The Paris-based enterprise banking startup nonetheless has a whole lot of tens of millions of money readily available. And it’s utilizing an undisclosed portion of its money reserve to accumulate Regate, an accounting and monetary automation platform.

Qonto initially began with on-line enterprise accounts with debit playing cards particularly tailor-made for small and medium companies. Over time, the corporate expanded its product providing to incorporate invoicing instruments, options to handle bills and loads of integrations with the fintech ecosystem to facilitate bookkeeping, fee reconciliation, and many others.

And that trendy tackle enterprise banking has labored surprisingly effectively as greater than 450,000 firms now have a Qonto account. Whereas France stays Qonto’s foremost market, the corporate additionally acquired its German competitor Penta — and moved Penta’s clients to its personal platform — and can be accessible in Italy and Spain.

In 2022, close to the height of the funding frenzy of 2021 and 2022, the corporate raised a large €486 million Sequence D funding spherical (that’s $529 million at in the present day’s change fee). Now, Qonto desires to ship on its unique imaginative and prescient of constructing an all-in-one finance answer for small and medium companies.

As a part of this imaginative and prescient, Qonto is buying Regate, a French startup we lined after it raised a €20 million Sequence A spherical ($22 million at in the present day’s change fee). Regate is an accounting automation software-as-a-service startup.

It integrates straight with present accounting software program platforms like Sage, Cegid and ACD in order that Regate can give attention to monetary automation. Regate clients can simply monitor incoming funds, schedule funds to suppliers, type by way of invoices and receipts, and even entry their financial institution accounts from Regate’s interface.

Since 2020, Regate managed to draw 10,000 shoppers — 6,000 of them are already Qonto clients. The corporate additionally sells its product to accounting corporations straight with 500 corporations utilizing Regate.

It’s a distinct go-to-market technique and product philosophy in comparison with Pennylane, a newly minted French unicorn that desires to switch legacy accounting software program solely. Pennylane itself now additionally supplies enterprise financial institution accounts and shifting into Qonto’s foremost product territory.

“We have now grown our income by 3x in 2023,” Regate co-founder Laura Pallier informed For Millionaires. However when Qonto approached Regate, they determined to promote the corporate to achieve the subsequent stage. “We had a relatively intense dialogue on the topic . . . We’re satisfied that the cockpit method — with a device that works for each SMEs and their accountants — makes much more sense than a number of merchandise.”

With in the present day’s acquisition, Regate’s crew of 100 staff will all be part of Qonto’s present 1,400-people employees beneath a brand new enterprise unit centered on monetary instruments for accountants. At first, there will probably be new integrations between each platforms.

After some time, Regate will probably be built-in in Qonto straight to enhance a number of accounting automation options of Qonto, similar to invoicing, accounts payables, accounts receivables, and many others. As for accounting corporations, they’ll additionally act as a brand new gross sales channel for Qonto.

“The concept is that these two platforms will steadily grow to be one. But it surely’s going to be a gradual course of, and we’ll all the time be very cautious to take care of the client expertise for each company shoppers and accounting corporations,” Pallier mentioned.

Extra acquisitions sooner or later

Whereas Regate’s acquisition is barely the second acquisition in Qonto’s historical past, it’s most certainly not the final one. Partially as a result of its executives are proud of how Penta’s integration went, but in addition due to its present alternative window.

“We occur to have a planetary alignment. It might be an expert mistake to not look [at potential acquisitions]. We’re not the very best at every little thing. So we must also keep humble and work with specialists of their respective fields,” Qonto co-founder and president Steve Anavi informed For Millionaires at Cellular World Congress in Barcelona final week.

“We have now an in-house crew that appears at alternatives. Within the best-case situation, we signal a deal. However even within the worst-case situation, we will grow to be companions as a result of we’ve discovered to know one another a bit of bit higher over a really brief course of,” he added.

Qonto finds itself in a distinct place from Payfit, one other French unicorn (or former unicorn) that gives a software-as-a-service device centered on payroll. Yesterday, Les Échos reported that Payfit plans to put off 14% of the corporate, or 110 staff.

Why are issues wanting higher for Qonto? “We have now a wholesome enterprise mannequin. It implies that once we purchase a buyer, after a number of months it’s a worthwhile buyer. That is primarily as a result of they pay — we don’t have any free providing. So, in comparison with a whole lot of fintech firms or startups basically which have a free providing after which attempt to upsell clients, we haven’t made that selection,” Qonto co-founder and CEO Alexandre Prot informed For Millionaires.

“The second aspect is that we raised a really massive amount of cash two years in the past. And we had been a bit fortunate as a result of the timing was proper,” he added. Lastly, rising rates of interest have additionally created a brand new income stream for the corporate. And given Qonto’s scale, the corporate is dealing with very massive sums of cash on behalf of its clients.

For these causes, Qonto has loads of money to spend on acquisitions. As many fintech startups are struggling to boost a brand new funding spherical, Qonto may grow to be a consolidator within the house. And we is likely to be at the start of this consolidation part.