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March 23, 2023

A guide to local European fintech ecosystems: Top five impressions from Paris

As members of the QED team continue to tour local European fintech ecosystems, we will share our top five impressions and highlights from each trip in order to give our followers a better sense of the rich and diverse fintech communities that are rapidly emerging across Europe.

The latest in this “top five impressions” series is Paris, which Alexandra Piedrahita visited this week.

After several visits to Paris over the last year, QED Managing Partner Nigel Morris and I hosted a dinner in Paris this week that solidified one key impression; The French ecosystem is on fire

Whereas the tech markets around the world retreated in 2022, French startups raised over $11.5 billion, a 6% YoY increase. This now makes France the second-largest tech ecosystem in Europe behind the UK, and having overtaken Germany for the first time. Furthermore, fintech as a percentage of total capital raised grew from 17% in 2021 to 19% in 2022 (although this still lags the leading European fintech market of the UK, where over 30% of capital raised goes to fintechs). The country has produced 27 unicorns, 11 of which are fintechs.


Impression No. 1: The flywheel has begun and Generation 2 is here.

The 11 fintech unicorns, many of whose founders had Silicon Valley experience prior to founding in France, are reaching maturity. These scale-ups are producing three key things for the ecosystem.

  1. They are spawning a second generation of founders.
  2. They have produced a deep pool of experienced operators for emerging companies to build strong teams from.
  3. Their founders and leaders of these firms have become active angels, further reinforcing the ecosystem. Companies such as Qonto ($5 billion valuation), Spendesk ($1.3 billion), Swile ($1.2 billion), Alan (~$3 billion), Alma and Lydia ( both~$1 billion) have taught hundreds of employees the key skills in going zero to 1. A large number of seed-stage founders who have successfully raised from VCs in the last two years are emerging from these companies.

Impression No. 2: Brexit helped strengthen the French fintech ecosystem.

This happened for two reasons:

  1. Paris became the European hub for global tier 1 banks including HSBC and JPMorgan. Close connectivity to the banks helps fintech flourish.
  2. Many operators and founders who were working in London returned home, and have since decided to stay in Paris.  

Impression No. 3: Plenty of capital.

It is no secret that most UK and U.S. funds place Paris frequent visits (if you don’t want to bump into them, avoid the Hoxton 😊) – over 60% of total capital raised by French startups in 2022 came from foreign investors. But beyond the international investors (that skew later stage) the local investor base is not only deep but tenured.

French funds like Partech and Alven -- with whom we had dinner during our trip -- were founded ~20 years ago, well before the ecosystem took off, and have been supporting the country through every cycle. The so called “BAs” (Business Angels) of France is the deepest and most active in Europe, and there are a long list incubators, venture builders, and government entities such as Station F (the largest startup campus in the world), Bpifrance (a public fund for investing in entrepreneurs), LogicFounders, and Paris Fintech Forum to support the founders in flexible forms and build the community. There are even plenty of Fintech specialist funds, which we believe is critical to the ecosystems, in Blackfin and Portage, with strong local presence. All in all, it’s an attractive place to raise capital.

Impression No. 4: Supportive and self-reinforcing ecosystem.

Any investor that has tried to enter France will tell you that the French ecosystem is famously tight-knit. Especially when it comes to fintech, many of the founders, operators, BAs and investors have known each other, went to the same schools and all grew up together at many of today’s scale-ups.

These tight relationships have made it a great place to launch new B2B products, as it makes it easier to test the market, get feedback and sign your first few customers. Especially when looking at fintech infrastructure, there is a close web of companies building on top of one another and selling to each other. The ecosystem is very self-sufficient and self-reinforcing, both great things for an early stage ecosystem. Many growth investors will be closely watching to see how many fintechs can grow successfully outside of France, as Qonto and Spendesk have proven it's possible to do.

Impression No. 5: It’s not a copycat market.

There are successful business models unique to France and plenty of true innovation happening at the early and late stages. There is nothing quite like many of the French ecosystems in the UK or even really in the U.S. Swile, a meal card benefits platform, was built on France’s unique culture to eat out and provide meal vouchers as an Employee Benefit (further incentivized by saving SMEs on payroll taxes). There’s nothing quite like Qonto’s innovative digital bank for freelancers and SMEs or Alan’s healthcare super-app outside of France. And when you look at the early stage there is more true innovation than “the X of France” models.

All this said, the market is not without its challenges. As fintech investors, we noticed an opportunity for closer ties to the banking system, especially as the scale-ups mature. And despite the government being very supportive of the tech industry, France is a tough regulatory market for fintechs (the lending regulations are the strictest in Europe). Finally, the golden question that looms over many investors heads is if France can create truly Pan-European or global fintechs such as Stockholm did for Klarna or and Amsterdam for Adyen. Exporting fintech is harder than other tech models, as you have to adjust for unique regulatory conditions and financial rails, on top of the usual cultural, GTM etc challenges. It's especially hard when your local market is big “enough” to build a great company.  

To conclude, there really is so much to be excited about in France – the quality of the founders, operators, and ideas have never been higher. Despite tougher market conditions, we have no doubt the dry powder around the world will flock to this market.

If you’re a fintech in France and we have not met, please do reach out!


Thank you to @Alex at @Eurazeo for a few of the helpful stats in this piece! Source: the 2022 State of French Tech Ecosystem by Alexandre Dewez at Eurazeo (who aggregates Dealroom, Crunchbase and other sources). I highly recommend reading if you’re interested to dive deeper into the stats!


QED Investors is a global leading venture capital firm based in Alexandria, Va. Founded by Nigel Morris and Frank Rotman in 2007, QED Investors is focused on investing in disruptive financial services companies worldwide. It has $3.7 billion AUM and has invested in 28 unicorns. QED has invested in more than 200 companies across 18 countries over five continents.

QED is dedicated to building great businesses and uses a unique, hands-on approach that leverages its partners’ decades of entrepreneurial and operational experience, helping companies achieve breakthrough growth. Notable investments include AvidXchange, Betterfly, Bitso, Caribou, ClearScore, Current, Creditas, Credit Karma, Flywire, Kavak, Klarna, Konfio, Loft, Mission Lane, Nubank, QuintoAndar, Remitly, SoFi, Wagestream and Wayflyer.