Swan, a Paris-based fintech company specialising in embedded finance, has successfully secured an additional €42 million in its Series B funding round. This latest investment was led by Eight Roads Ventures, with contributions from existing investors including Lakestar, Accel, Creandum, Hexa, and BPI France.

The financial backing is aimed at facilitating product innovation, expanding Swan’s presence across Europe, and enhancing customer acquisition and retention strategies. The company is poised to tap into anticipated significant market growth in the coming years.

Swan's platform permits businesses to offer financial services without the need to navigate regulatory complexities themselves. For instance, notable customers such as accounting software provider Pennylane and freelancer platform Indy rely on Swan to incorporate accounts and payment functionalities directly into their services, thus providing seamless banking solutions to end-users.

Founder and CEO Nicolas Benady articulated a vision for the future of business management software, stating, "In the future, I believe business management software will become a key distributor of banking services. Whether it's for HR or Accounting, these tools will offer banking features seamlessly integrated into the user's workflow. This means you'll have access to banking services right when you need them, directly in the tool you're using. We call this embedded banking." Benady emphasised that Swan is diligently working to provide both the technology and compliance framework essential for small and medium-sized enterprises (SMEs) across Europe to realise this vision.

The concept of embedding financial products is becoming increasingly viable, particularly as it enables companies to accrue interchange fees, interest income, and subscription revenues. Additionally, the rise in interest rates has augmented the value of these products.

Lucile Cornet, a Partner at Eight Roads Ventures, highlighted the expansive potential of embedded finance, stating, “We believe the embedded finance opportunity is immense, and that banking services will increasingly be offered directly where users are, within existing software and workflows. We've known Nicolas and his team since their early days and have been consistently impressed by their rapid progress, Tier 1 customer base, and successful international expansion.”

Swan's regulatory model is distinctive, as it alleviates its customers from the burden of establishing direct regulatory relationships. This allows businesses to concentrate on their commercial efforts while Swan manages compliance, Know Your Customer (KYC) processes, and risk management. Currently, Swan operates in 30 European countries, positioning itself as a compelling player in the embedded finance market landscape.

Source: Noah Wire Services