Fintech
Hero wants to save the day for companies facing a working capital crisis
Heroa new Paris-based fintech startup announces an €11.3 million all-equity funding round led by Valar Ventures ($12.2 million at today’s exchange rate). Over the past two years, the company has been quietly building an ambitious small business banking product that can essentially replace everything you’d expect from a traditional bank, from managing money to accepting payments and getting a line of credit .
When starting a company in France, it has become quite simple to register it and get a bank account in the name of your company. At the same time, a bank is much more than just an IBAN and a debit card.
Running a business also often means having to accept payments in one way or another. And if things are going well, especially if you’re selling goods, you may need to finance your next inventory purchase and pay your suppliers up front.
The result is that small business owners are often faced with a myriad of fintech products. They also need to find an income-based company that is willing to provide short-term loans to small businesses – in France they exist Silver, In fact, Karmen, Unlimitedetc. Alternatively, they can negotiate with a traditional bank to obtain a loan.
Hero wants to aggregate these technological and financial services into a single product. Customers can use the product to send, receive and hold money with multiple accounts and IBANs. The startup also offers payment cards.
The company built its own core banking system. While many fintech startups partner with swan For financial infrastructure, Hero does not rely on a banking-as-a-service partner.
Retailers can choose Hero as their payment solution using an API, an e-commerce platform plugin, or payment links. On this front, the startup is relatively attractive compared to Stripe as transaction fees start from 0.4% + €0.15 per transaction.
Hero mainly plans to make money with its credit offering. You can send a vendor invoice to Hero so they pay it immediately. Then you have up to 90 days to pay the invoice.
Likewise, you can send the invoices you have already sent to your customers and receive the money in advance. You don’t have to worry about whether your client will pay you next week or next month. In both cases, Hero customers will have to pay interest on these credit products.
Hero founder and CEO Roland Jais-Nielsen already knows why cash flow problems can really hurt a company as he previously founded Merci Handy, a brand of fancy hand sanitizer and cosmetics.
The startup has developed its own risk assessment engine to evaluate a customer using both public and private data. Hero decides whether it wants to provide financing to its customers, but the startup has created a debt fund with a financial partner – unfortunately it doesn’t share anything else on this front.
Hero previously raised a €7 million funding round in 2022. SquareOne, an investor in this seed funding round, is also participating in today’s new funding round.
It will be interesting to see whether Hero’s focus on building everything in-house will provide an advantage over other financial companies. He also creates some challenges. For example, the company is still waiting for regulator approval from the ACPR for its payment services.