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French fintech Qonto is talking to investors about a sale of existing shares that could value it at €5 billion, the latest such deal as companies seek to reward employees and early backers in the face of a weak quotation market.
The neobank plans to sell at least 200 million euros of shares held by employees and early investors and has had discussions with several funds, according to sources familiar with the matter.
Qonto, already one of France’s most valuable technology companies, is seeking a valuation of around 5 billion euros, the sources said. But they cautioned that no price had yet been set and it was unclear whether a deal would be reached.
Qonto was last valued at €4.4 billion in a 2022 funding round in which it raised €486 million from investors including Tiger Global, TCV and Tencent. The company declined to comment on the latest stock offering.
The sale would make Qonto the latest fintech company to turn to the secondary market at a time when exits for founders and investors are difficult as the IPO market remains tepid.
A successful deal would make Qonto one of the few European fintechs to increase its valuation in recent years after rising interest rates and changing investor sentiment hit the sector, ending a period of hypergrowth that had pushed fundraising levels to a record in 2021.
Revolut, Europe’s largest technology company, completed a $500 million employee stock sale in August, increasing its value from $33 billion to $45 billion. Other UK fintechs Monzo and GoCardless are also aiming for similar deals.
David Sainteff, partner at Global Founders Capital, said several European fintechs were well positioned for secondary sales because they had reached a more mature stage, had grown in scale and lenders benefited from higher rates.
“Since 2021, many early hires have recognized that liquidity event opportunities may be limited and IPOs postponed,” Sainteff said. “We will likely see more and more employee stock sales in successful companies, as these companies will need to attract, retain and motivate top talent.”
Qonto was founded in 2016 by entrepreneurs Alexandre Prot and Steve Anavi with the aim of providing better financial services to other entrepreneurs.
It offers a suite of services including invoice management to more than 500,000 small and medium-sized businesses in France, Spain, Italy and Germany. The fintech does not have a banking license but grants loans through partnerships with other institutions.
Qonto’s growth has been fueled by entrepreneurs, sole traders and small businesses, but it has sought in recent years to attract larger clients, while also offering software services.
The group has also embarked on a European expansion, announcing earlier this year its launch in Austria, Belgium, the Netherlands and Portugal.