B2B startup of the universe cryptothe French Fipto raise 15 million euros in seed. Its ambition: to exploit the blockchain to facilitate payments from companiesbut also their simplify the digital asset management. Interview with its co-founder and CEO Patrick Mollard.
The crypto winter is not very favourable a priori for fundraising. What’s more, according to the 2023 barometer published by France Digitale and EY, startups based in France struggled to convince investors in the first half of the year. In the face of reluctance, 7% preferred to throw in the towel.
It was against this backdrop that startup Fipto announces a seed financing round of 15 million euros. For this round of financing, the French start-up can count on the support of Serena and Motier Ventures.
Banking and payments professionals at the helm
A successful operation for the founders of Fipto after a creation in March 2022 and a beta launched only last June (when V1 was imminent). It’s true that they have a number of convincing arguments at their disposal.
Firstly, a purely B2Bmore sheltered from the bear market and its effects. It is also the solid experience of its managers in the world of paymentsa mature sector, but one that blockchain could transform.
Finally, to appeal to investors and Business-to-Business customers, Fipto relies on a two-headed product focused on international payments and the cash management (composed naturally of digital assets).
APIs to integrate with customer applications
This two-headed product is also API-based, enabling it to be integrated into existing corporate applications – even though Fipto has developed a Web front end, the first API client.
This front end acts as a gateway to the service and its functionalities. And as Patrick Mollardthe startup’s CEO and co-founder, a front end was a must, as it acted as a showcase to convince users and investors.
The company has therefore devoted considerable effort to this product over the past year. On the 30 employees 20 are dedicated to product development and R&D.
PSAN and payment institution approvals
Compliance is another must in this industry. Fipto (formerly Numias) is PSAN registered and announces its ambition to obtain approval as soon as possible, without waiting for the end of the 18-month transitional period provided for by MiCA.
We’ll be thinking ahead. In fact, our solution already takes into account regulatory constraints, such as the request for information introduced by the Travel Rule. This is part of our drive to reassure our corporate customers about compliance and security. These are key issues for us”, declares Patrick Mollard.
The startup has other regulatory projects in the pipeline, including an application for approval as apayment institution to cover on- and off-ramp. Approval “passportable throughout Europe”. Fipto integrates digital assets into a broader scope, that of payments.
Services for Web3 players, Tradis and pure-players
The typology of targeted customers is indeed plural. To date, a dozen customers has been onboarded. We’re just beginning to test our use cases,” explains the CEO. The profiles are diverse, with logistician Argo Freight in particular having to deal with issues of payment execution speed and transparency.
For this clientele, Fipto highlights the benefits of its solution, which focuses on the efficiency of international payments “on complex corridors”. At the same time, the startup is targeting pure-players in the Web3 and to traditional companies developing their business in this sector, for example through the sale of NFT.
For the former, Web3 natives, Fipto’s service meets a need to management multiple digital assets. A consulting firm is paid in tokens. In this context, it frequently swaps tokens and “off-ramps to pay salaries, rent or other expenses in traditional currency”.
On a commercial level, the startup is targeting the European market as a priority.
Our customers will be European, notably for regulatory reasons. That doesn’t mean they don’t have financial flows to manage with other, more distant geographies.”
Complex corridors: use cases for blockchain
Fipto also aims to forge closer ties with other experts in the fields of payments PSPto propose the integration of its payment rails to complete their offer.
These could be PSPs that are very strong in Euro/Euro payments and need a solution for international payments on complex corridors”, says Patrick Mollard.
Fintech PSPs, corporates with international (and therefore complex) flows, and companies seeking growth on the Web3 (traditional or pure-players) are all prime targets for the young company.
More than half of CAC40 and SBF120 companies are working on Web3 initiatives. In this context, they need to manage digital currencies, receive and issue them, as well as store, monitor and change them if necessary”, stresses the CEO.
For these treasury operations, Fipto includes specific functionalities, and in particular “the entire governance layer to which companies are accustomed: multi-signature, threshold, financial reporting for auditors… We bring this whole layer to our customers”.
A bridge between the fiat and crypto worlds
The competition is not inactive, however, particularly when it comes to payments. This area, for example, is a strategic priority for Coinhouse, whose former employee has joined Fipto. There’s also Ripple, which has its own token.
Our approach is to be agnostic about the underlying asset that customers want to use (…) Our aim is to bridge the gap between the fiat, traditional world and that of digital assets. Fipto’s added value also lies in its expertise in payments, security and compliance, essential for reassurance with regard to new tools”, defends the CEO.
The startup is betting on its differentiators, but also on the contribution of the blockchain in relation to the limitations of existing solutions, Swift and the network of correspondent banks in the first instance.
These technologies do not “provide a service that meets the ever-increasing expectations of customers with regard to theimmediacy “.
With blockchain, Fipto intends to make available ” an additional payment rail “. Of course, not everything in today’s systems is flawed.
The main corridors work. We pay very well in dollars or euros. On other, more complex ones, we can add value through technology.”
An American dream on hold: the fault of regulation
The ambition is defined. The fund-raising aims to serve it through several objectives. The first is to validate the various use cases proposed, in order to “accelerate in 2024 on the one we have decided to prioritize”.
This stage will then enable us to set a more precise commercial target for theEurope. Internationally, the startup is also “preparing” its expansion into the US market. However, the “regulatory context” has led Fipto to delay its move.
We are taking our bearings and observing”. An inflexion in the SEC’s policy towards crypto could undoubtedly act as a trigger.
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