10 Challengers Disrupting SME Banking
I find banking for the self-employed, freelancers, micro-entrepreneurs and small/mediun enterprises (“SME banking” for short) a fascinating space. Perhaps it is because the traditional ‘retail’ challengers like Monzo, Revolut and N26 are ‘old news’ for the fintech ecosystem.
There appears to be a significant amount of funding and business activity in this space in the EU. Similary to the retail banking challengers, Europe appears to have outperfomed the US in the pace of innovation when it comes to providing banking services for the small entrepreneurs as well (even though ambitious startups such as Joust are starting to change the landscape over the pond as well).
In this short article, I wanted to highlight the 10 startups which are disrupting SME banking in Europe. This is by no means a conclusive list, so please reach out to fill in any blanks. Purely subjectively, the 10 companies I included seem to represent the innovation that is happening in Europe in the SME space well.
Tide.co landing page
Selection Criteria
There is a strong push by the big fintechs to push into this space. Even though attemps by Revolut to introduce business accounts are interesting and admittedly the likes of Starling have a significant foothold in the space; I have focused here on companies which focus solely on the entrepreneur space as I think they deserve all the attention here.
Secondly, my focus here is only on companies which can be described as true banking propositions - meaning that there is a full-fledged transactional banking account at the heart of the propositions. Therefore, I have not included various aggregator plays, innovative accounting and payroll solutions, expense/payables solutions and so on.
The 10 Challengers
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Short Profiles
Holvi Holvi is digital banking for freelancers and small business owners. Even though acquired by BBVA, it claims a large amount of accounts open on their platform.
Penta Penta is a digital business bank platform designed to help startups and SMEs save time and money on banking. Running on Solaris Bank, it provides fast online banking for startups and SMEs and operates in Germany and Italy.
Tide So far one of the early winners of the SME market in the UK, Tide is a business banking platform on a mission to save small businesses time (and money) on their banking and admin.
Qonto one of the serious conteders for European category championship with signifant funds raised, Qonto makes business banking easy, efficient and transparent, leveraging technology, elegant design and world-class customer support.
Counting Up with the claim ‘Banking that automates your accounting’, Counting Up has bets strongly on the accounting automation with underlying banking service.
Kontist Banking for freelancers & the self-employed serving predominantly the German market.
Anna standing for ‘Absolutely No-Nonsense Admin’; Anna gets you business account and debit card. They also do your invoicing, track your expenses and sort your company taxes.
Coconut focusing on the micros segment, Coconut claims to be the ultimate accounting and tax tool for self-employed people in the United Kingdom.
Shine is another entrant from France, According to the company’s Crunchbase profile 'it offers freelancers a multitasking solution platform that combines online banking with contract and invoice management, streamlining administrative and financial tasks for those who work independently”
Finom set-up in 2019 and acquiring its initial customer cohorts; Finom is a relatively new kid on the block. However, the company has just recently closed a decent-sized seed from Target Global and could be one of the challengers in the quest of building a truly pan-European SME bank.