Character, a recent fintech startup based in Paris, proclaims a €11.3 million equity financing round led by Valar Ventures ($12.2 million at today’s exchange rates). Over the past few years, the company has been quietly building an ambitious small business banking product that might essentially replace every part you’d expect from a traditional bank, from managing your money to accepting payments and obtaining a line of credit.
When you arrange a company in France, it has develop into quite easy to register it and arrange a checking account under your organization name. At the same time, a bank is much greater than just an IBAN number and a debit card.
Running a business often involves accepting payments in one way or one other. And if all goes well – especially if you sell goods – you might need to finance one other inventory purchase and pay suppliers in advance.
As a result, small business owners are often faced with a myriad of fintech products. They also need to find a revenue-driven company that is willing to provide short-term loans to small businesses – in France there are companies corresponding to Silvr, Defacto, Carmen, Unlimitedetc. Alternatively, they will negotiate with a traditional bank to get a loan.
Hero wants to mix these technology and financial services into one product. Customers can use the product to send, receive and store money using multiple accounts and IBAN numbers. The startup also offers payment cards.
The company has built its own basic banking system. While many fintech startups work with Swan Hero does not rely on a banking-as-a-service partner for its financial infrastructure.
Retailers can select Hero as their payment solution via API, e-commerce platform plugin or payment links. In this respect, the startup is relatively attractive compared to Stripe as transaction fees start from 0.4% + 0.15 euros per transaction.
Hero mainly plans to make money from its credit offering. You can send your supplier’s invoice to Hero for immediate payment. You then have up to 90 days to pay the bill.
Similarly, you’ll be able to upload your personal invoices that you just have already sent to your clients and receive money upfront. You don’t have to worry whether your client can pay you next week or next month. In each cases, Hero customers will have to pay interest on these loan products.
Hero founder and CEO Roland Jais-Nielsen already knew why money flow problems could really hurt a company, having founded Merci Handy, a brand of fancy hand sanitizers and cosmetics.
The startup has developed its own risk scoring engine, allowing customer assessment based on each public and private data. Hero decides whether it wants to provide financing to its customers, but the startup has arrange a debt fund with a financing partner — unfortunately, it doesn’t share more on this topic.
Hero previously raised a €7 million funding round in 2022. SquareOne, an investor in this initial funding round, is also participating in today’s recent funding round.
It will probably be interesting to see if Hero’s focus on building every part in-house provides an advantage over other financial companies. This also creates some challenges. For example, the company is still waiting for regulatory approval from ACPR for the payment services it provides.