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Revolut Backer Lakestar Announces $40M Investment in Fintech Startup Swan
European venture capital giant Lakestar is known for its early investments in FinTech startups. After being an early supporter of fintech unicorn Revolut, Lakestar has invested a massive $40 million in Frend fintech startup Swan.
Swan has secured additional funding in a series B investment round, with European venture capital leader Lakestar taking the lead. This latest round has brought Swan’s total raised capital to 58 million euros. It’s worth noting that Accel, another venture capital firm, previously spearheaded Swan’s series A funding round in 2021.
Swan CEO and co-founder Nicolas Benady remarked that during the company’s inception, the process of integrating banking and other financial services into platforms lacking financial components was exceedingly intricate. Speaking to CNBC, Benady said:
“What we had in mind with our co-founders was that it shouldn’t be that complex,” he told CNBC. “If it’s easy to accept payments – like the Stripes, the Adyens, and the Mollies of this world enable – it should be as easy to set up banking. If you develop a big idea … at 2 a.m., it should be possible to come onto our website and have something up and running in the morning”.
Swan plans to allocate the newly acquired funds to expand its operations in the Netherlands in the immediate future. Subsequently, in 2024, the company intends to extend its operations into the Italian market.
Benady pointed out that the Dutch market possesses distinctive characteristics that distinguish it from other European nations. Consequently, launching digital banking and payment services for customers in the Netherlands is more complex. One noteworthy feature is the presence of iDEAL, the country’s proprietary payment system, which allows consumers to make online payments through their own banks. iDEAL enjoys support from all major Dutch banks, including ABN Amro and ING Group.
Fintech Startup Swan Makes Robust Progress
Georgia Watson, a principal at Lakestar based in the firm’s London office, said that they are quite happy with the robust progress Swan has made over the last year. Swan has been setting up embedded financial solutions with businesses in less than two weeks.
She further added:
“We really like that they’re giving their clients the ability to create new product lines, new revenue lines, with attention for their end users. Swan’s clients “don’t have to think about the regulatory aspects when they want to add on new products, which can be very time consuming and create additional risk for the company.”
Accel’s partner, Luca Bocchio, emphasized Swan’s superior scalability compared to its counterparts in the embedded finance sector. Competitors like Railsr and Solarisbank have encountered challenges in their efforts to seamlessly integrate payment systems and other financial services into corporate platforms. Earlier this year, Railsr had to seek bankruptcy protection and was eventually acquired by a consortium of investors led by D Squared Capital.
Revolut Backer Lakestar Announces $40M Investment in Fintech Startup Swan
