Swan Secures €42 Million to Strengthen Its Embedded Banking Services

French embedded banking startup Swan has announced an additional €42 million (approximately $44 million) in funding as part of the second tranche of its Series B round, initially disclosed in September 2024. The funding round is led by Eight Roads Ventures, with continued support from existing investors Lakestar, Accel, Creandum, Hexa, and Bpifrance, which had previously backed Swan during its seed stage via the Digital Venture fund.

Swan enables companies to integrate financial services directly into their offerings, allowing them to create virtual and physical payment cards. These cards are compatible with Apple Pay and Google Pay and can be configured programmatically by corporate clients with customizable features such as spending limits and merchant restrictions. The company also offers the ability to generate payment accounts with individual IBANs, supporting various functions including pay-ins, pay-outs, and SEPA direct debits. These payment accounts act as the primary source of funds for the payment cards.

The startup has become a trusted partner for several fast-growing businesses. Among its key clients is Pennylane, a French accounting startup that reached unicorn status in 2023. Pennylane utilizes Swan's infrastructure to offer payment accounts and cards as part of its broader services. Similarly, Indy, a platform catering to freelancers with administrative solutions, has leveraged Swan to enhance its product offerings. Other notable clients include Agicap, Factorial, Lucca, and Sesame.

Currently, Swan works with over 150 companies and processes €1.5 billion in monthly transactions. The startup's ability to manage such a large transaction volume is underpinned by its proprietary core banking system, which distinguishes it from many competitors that rely on third-party fintech APIs. This in-house infrastructure enables Swan to provide localized IBANs and country-specific payment options, making its services highly adaptable across different markets.

Lucile Cornet, partner at Eight Roads Ventures, highlighted the importance of embedded finance in today’s digital economy, stating, “We believe the embedded finance opportunity is immense, and that banking services will increasingly be offered directly where users are, within existing software and workflows. We’ve known Nicolas and his team since their early days and have been consistently impressed by their rapid progress, Tier 1 customer base, and successful international expansion.”

Although Swan has not disclosed its current valuation, co-founder and CEO Nicolas Benady confirmed that it has increased. “We’re not a unicorn yet, so we don’t mention it,” he commented. Despite not reaching the coveted valuation threshold, Swan’s growth trajectory demonstrates the rising demand for its services.

One of Swan’s significant advantages is its ability to handle compliance and KYC (know your customer) obligations on behalf of its clients, allowing businesses to offer financial products without directly managing financial risks. With its latest funding secured, Swan plans to continue its international expansion, with Italy identified as the next key market on its roadmap.