Is France the next European fintech hotspot?

 Gus Mallett photo
Gus Mallett Content Writer
3min read

Bonjour! Comment allez-vous?

France’s fintech star is rising. With over 1100 of them based in the capital alone, junior minister Cédric O has promised that Paris will eclipse London as the fintech hotspot in Europe in the near-distant future.

It’s a big claim for sure. Let’s find out if it holds weight.

And make sure you check out this episode of our Fintech Insider Insights podcast. We chatted about these ideas at length and covered a whole load more.

What’s the story?

French startups finished 2019 with an extra €4bn in the coffers thanks to some serious VC funding. Last year, it was €5bn. 10 months into 2021 and we’re already at €5.6bn. The numbers paint a pretty compelling picture. Like Monet but for fintechs.

The numbers paint a pretty compelling picture.

France is a very attractive market to US investors at present. The last couple of years has brought a sea change in mentality and now ‘European scale’ is all the rage. President Emmanuel Macron has previously gone on record that the country must preserve its “digital sovereignty” and reduce its dependence on US tech giants. Government funding to the tune of €4bn definitely won’t upset that particular apple cart.

Funding rounds are also getting bigger. Lydia netted a cool $131 million in a Series B last year. In June, Ledger became the country’s first fintech unicorn after a massive $380 million Series C. The French space even has its own niche. They’ve registered more than 450 AI companies and, in Yann LeCun, lay claim to one of the so-called ‘Godfathers of AI’. Now that’s an offer you can’t refuse.

How did we get here?

Well, that €4bn government funding that I mentioned was pretty helpful. But in truth there are a few good reasons. France has a solid foundation in banking. It’s fertile ground for success. Add some skilled engineers into the mix and you’re looking at a culture that solves problems from a first-principles perspective. And success breeds success. It was only a matter of time before the venture capitalists woke up and smelled the coffee.

It was only a matter of time before the venture capitalists woke up and smelled the coffee.

What does the future hold?


Having just pipped Sweden to a top three spot in the best European destinations for investors, France has its sights set on growth with a side order of growth. According to Lydia CEO Cyril Chiche: “Every big investor now stops in Paris”. And not just to see the Louvre.

Head of Sales for UK and Ireland at Spendesk Paddy O’Neill believes France could be right at the centre as our ways of working continue to change: ‘Actually what does work look like in the future? How do we spend money?’ Financial management platform PennyLane has raised €30 million in the year since it was founded and now boasts 2000 clients. They aim to become ‘the favorite all-in-one financial tool for French startups and SMEs.’ by the end of the year. Next on the agenda? In all of Europe.

What might get in the way?

Well, the UK is still pretty far ahead when it comes to fintech investment. But setting that to one side, experts are concerned that data protection laws in Europe might put a dent in some of France’s AI-shaped ambitions.

There’s also the matter of regulation. Banks looking to invest in or partner with French startups have to jump through a lot of regulatory hoops first. For every successful Treezor acquisition, there are deals breaking down before they get off the ground. Fintechs have to follow strict compliance rules when they become a subsidiary. Striking a deal without giving pause to consider what the new relationship will look like is a recipe for disaster.

Thanks for stopping by

And that’s a snapshot of French fintech. Paris still has a little way to go before it seizes the throne. But the signs so far are very promising. With a little more domestic and international investment, the landscape of European fintech will keep shifting before our eyes.

Bon chance!