French startup Swan has raised an $18.7 million Series A funding round (€16 million) led by Accel. The company provides a banking-as-a-service platform for other products and services.
Embedded finance has been an important trend for the past few years in fintech. Companies that operate in this space provide financial services to other companies. Those clients act as a distribution channel for financial services with the embedded finance company acting as the backbone for all things finance.
This way, some companies that don’t want to run financial services can still offer financial services. And other companies can specialize in API-based products that unlock some new features for their clients.
Swan partners with SaaS companies, marketplaces and even other fintech startups so they can offer white-labeled banking features. For instance, you can leverage Swan’s API to generate accounts and cards using API calls.
Existing investors Creandum and Bpifrance also participated in today’s funding round. Some of Swan’s clients include Agicap, Alma, Expensya, Fintecture, Mon Bel Appart, Pennylane and Ride.
When it comes to account creation, each account comes with its own IBAN. End customers can access those accounts using a Swan-designed web banking interface. Swan clients can choose to design their own interface on top of Swan’s data.
When it comes to cards, Swan lets you generate both virtual and physical cards. They work with Apple Pay and Google Pay. Swan customers can limit some features, such as ATM withdrawals, or they can let their customers control their cards directly.
The startup has an e-money license and can offer services across the European Economic Area. It also handles regulatory requirements, such as identity verification and fraud detection. Solving these pain points alone is an important selling point as Swan customers don’t have to handle the regulatory requirements themselves.
With today’s funding round, the company plans to expand to Germany with a new office in early 2022. Swan will compete with Berlin-based banking-as-a-service company Solarisbank. But Swan also plans to let developers start using the company’s APIs directly with a self-service model.
“Our ambition for this funding round is to provide banking features with local flavor, specialized for a multitude of local EU markets: Ideal in the Netherlands, Ibans starting with DE in Germany, Capital deposits accounts in France, and much more!” co-founder and CEO Nicolas Benady said in a statement.
As you may have noticed, fintech has become a busy vertical for tech startups. With its B2B2C strategy, Swan doesn’t have to create a financial super app to become the main financial touch point with millions of users. And chances are many people are already using Swan services without realizing it.