Qonto, the French business banking unicorn, today announced plans to acquire German fintech Penta.

The deal is expected to close in the next few weeks, and will help Qonto push hard into Germany — where it hopes to become the market leader. The companies did not say how much the acquisition was for, but German media reported that the price was in the “mid-three-digit million range.” 

Qonto’s longer term goal? Become the leading bank for SMEs and freelancers in Europe.

What’s Penta?

• Founded in 2017, Berlin-based Penta serves small-and-medium sized businesses. 
• It has 50k customers in Germany and 200 employees. 
• Penta has raised at least €51m from investors including Finleap, HV Capital, RTP Global and VR Ventures, according to data platform Dealroom. In February, insurer Signal Iduna took an undisclosed stake. 

What’s Qonto?

• Founded in 2016 and launched in 2017, Paris-based Qonto has 250k clients across four markets (France, Germany, Italy and Spain) and employs more than 700 people.
• It helps SMEs and freelancers with banking, invoicing, book-keeping and spend management. 
• In 2021, Germany was Qonto’s fastest-growing market, seeing 170% year-on-year growth.
• Qonto has raised €622m from investors including Tencent, DST Global, Tiger Global, Eurazeo, Insight Partners and Alven.
• Qonto was valued at €4.4bn at its last funding round — a €486m raise in January this year, which was at the time France’s biggest ever fintech fundraise.

Which other business bank upstarts are there in Europe?

In the UK, there are plenty of neobanks offering business banking:

• Tide, launched in 2015 and focused solely on SME business accounts. $271m raised to date, from investors including Creandum, Augmentum, LocalGlobe, Passion, Anthemis and Speedinvest.
• Starling, launched in 2016. Caters to both retail and business customers. Announced first annual profit in July this year.
• Coconut, launched in 2016 and focused on freelancers and very small businesses. £5.6m raised. 
• Anna, launched in 2017, which offers current accounts for startups and SMEs. The Welsh startup has raised $44m to date.
• Mettle, launched in 2018 and bootstrapped. 

In Germany, there’s also: 

• Kontist, launched in 2016, which focuses on freelancer banking. It’s raised $31m to date.

Elsewhere in Europe, there’s: 

• Juni, a neobank built for ecommerce merchants, which has raised $176m from investors including Cherry Ventures, DST Global, Felix Capital, EQT Ventures and Mubadala. The Gothenburg-based startup, which launched in 2019, last raised a $206m Series B (debt and equity) in June. 

In France, Qonto’s main competitor was Shine, which also launched in 2017 and was acquired by Société Générale for €100m in 2020. Finnish business bank Holvi launched in 2011 and was acquired by Spanish bank BBVA in 2016 and before buying itself out in 2021.

Sifted’s take

Traditional banks were slow to adapt to small businesses’ banking needs — in part because they weren’t extremely profitable customers for them — and plenty of startups slipped in to provide digital services better catered to the needs of freelancers and entrepreneurs. 

Qonto now has a solid customer base — and the Penta acquisition cements that further — but will want to keep expanding into new markets and services to deepen its moat and stop upstarts pinching current, or potential, upstarts.

Amy Lewin is Sifted’s editor and cohost of The Sifted Podcast. She tweets from @amyrlewin