A France-based FinTech startup just secured $11 million in funding to expand its small business services.
IbanFirst's venture capital round, led by Xavier Niel, was revealed in reports on Tuesday (Oct. 18). The company offers foreign exchange services for SMEs, but according to TechCrunch reports, the startup will use the latest investment to expand its financial services offerings to become more like a bank.
Foreign exchange services are big money with SMEs for traditional banks. A report released earlier this year by cross-border payments firm Covercy found that U.K. SMEs are paying excessively high fees for their FX services. A company with an average of 20 FX transactions a month, each totaling $1,300, can pay more than $1,400 a month in fees, researchers found.
The company has already secured a banking license in Belgium, reports said, allowing it to operate as a bank across the European Union. IbanFirst highlights the speed with which SMEs can set up their bank accounts and receive an IBAN. With its FX services, IbanFirst offers competitive rates for small businesses to exchange money and make payments across borders.
In addition to basic banking features, IbanFirst said it plans to add additional financial services capabilities into its offering for SMEs, and the firm will look to partner with other FinTech firms to do so. Reports hypothesized integrations with payment processors, commercial card issuers, alternative lending sources and more.
FinTech disruptors have largely positioned themselves as competitors to traditional financial institutions but have also emerged as a way for traditional banks to offer SMEs and consumers more innovative, competitive features by partnering and integrating startups’ solutions into the bank.