Embedded finance for SMEs is rapidly expanding across Europe, transforming the way small and medium-sized businesses access financial services. Jumping on the bandwagon, Swan, a French embedded finance provider that enables companies to offer seamless banking features, has announced to have secured €42M in Series B funding to accelerate its growth further. Eight Roads Ventures (Lighthouse backer) led the round, joined by existing investors Lakestar, Accel, Creandum, Hexa, and BPI France.
Expansion on cards
This fresh capital will drive the French fintech’s expansion into key European markets like Italy, enhance its banking solutions for SMBs, and accelerate the development of tailored card programs. With plans to hire 85 new employees, Swan is strengthening its position as a major banking partner for European SMBs.
Emerging leader in embedded financial services
Founded in Paris in 2019 by Nicolas Benady and Nicolas Saison, Swan was created to make embedded banking accessible to all. In a conversation with TFN, Benady explained: “Embedded banking existed before Swan, but it was too complicated! You had to sit through long meetings, sift through piles of paperwork, and hire your own banking ops and experts. It was so difficult that most companies benefitting from embedded banking simply wouldn’t do it.”
How does Swan address this market gap? The solution is straightforward: it enables companies to offer financial services without becoming regulated themselves. For instance, accounting software provider Pennylane and freelancer platform Indy use Swan to offer their customers accounts with payment capabilities, allowing all transactions and reconciliations to happen in one platform.
“In the future, business management software will become a key distributor of banking services. Whether for HR or Accounting, these tools will offer banking features seamlessly integrated into the user’s workflow. This means you’ll have access to banking services right when you need them, directly in the tool you’re using. We call this embedded banking. At Swan, we’re working hard to provide both the technology and compliance framework to make this a reality for European SMEs,” said Benady.
Swan’s approach to regulatory compliance: simplifying banking integration
Swan sets itself apart in the embedded finance market with its self-developed core banking system, localised offerings, highly efficient solutions, and distinctive regulatory framework. By constructing its core infrastructure in-house, Swan retains full control over its product roadmap, allowing for more advanced banking features than its competitors.
“It’s not just the technology that makes Swan unique. Yes, it’s robust and well-built. Yes, the user interface is sleek. But it’s our regulatory approach that made this possible. We worked closely with our regulator to build a relationship where Swan fully owns the payment and fraud risk. This means companies embedding banking with Swan are freed from regulatory compliance burdens — no lengthy training or months-long approval processes,” shared Benady.
Tapping into the $185B market opportunity of embedded finance
The embedded finance sector represents one of fintech’s fastest-growing opportunities, valued at $185 billion globally, including $72 billion in Europe. Embedding financial products creates significant new revenue through interchange fees, interest income, and subscription fees while boosting customer retention. With advancing technology making implementation easier and rising interest rates increasing value, the timing for embedded finance adoption is ideal.
“We believe the embedded finance opportunity is immense, and banking services will increasingly be offered directly where users are, within existing software and workflows,” said Lucile Cornet, Partner at Eight Roads Ventures.
Swan is pioneering the next wave of fintech innovation with a clear commitment to making banking services more accessible. While the first banking revolution moved transactions from physical branches to Internet banking and mobile apps, making traditional banking more accessible, embedded banking represents a fundamental shift.
“The big banks won’t just compete with a few neobanks — they’ll face tens of thousands of software companies offering embedded banking. Most SME banking needs will be handled within their daily tools. Imagine a Healthtech platform where doctors manage all financial matters — including patient payments — in one place. Or a social app empowering marginalised groups with financial services. Picture a PropTech company giving property managers real-time transaction visibility with their tenants. The possibilities for impact are limitless and across all industries,” concluded Benady.
Swan faces tough competition in Europe from several major players in the embedded finance and payment processing space, including OpenPayd, Adyen, Stripe, and others. OpenPayd offers similar banking-as-a-service (BaaS) solutions, enabling businesses to embed payments and financial services into their platforms. Adyen competes with Swan by providing a global payment processing platform that supports a wide range of payment methods and currencies. Stripe, with its developer-first tools, is a leader in e-commerce payment solutions and embedded financial services, offering robust APIs for a variety of business needs.
Last year, Swan also partnered with Wise to compete more aggressively in the embedded finance space and enable its clients to send and receive money from more than 190+ countries.
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