For the past few years, everybody working in fintech has been talking about embedded finance. It’s supposed to be the next revolution in financial services — bringing financial services to other products and services so that these services are as seamless as possible for the end users.

That’s why it’s interesting to see that Swan, a French startup working on embedded banking, has managed to raise a $40 million Series B funding round (€37 million). First, it’s significant because it’s a big funding round for the French tech ecosystem as big funding rounds aren’t as common as they used to be.

Second, it proves that there’s still room for a relatively new startup trying to build the definitive embedded banking solution for the European Union. Swan isn’t the first embedded banking startup in Europe. Some companies like Solaris and Treezor have been working on this topic for years. Other fintech giants like Adyen and Stripe have launched their own embedded banking services. In the U.S., embedded banking companies like Unit and Synctera have thrived.

Swan thinks it can build a better embedded banking company by focusing on a handful of pillars — building native features as much as possible to improve the experience for developers and end customers, providing both a ready-made banking interface and a full-fledged API, and localizing the product as much as possible for every European market.

Lakestar is leading today’s funding round with Swan’s existing investors also putting more money in the startup. Accel led Swan’s Series A round in 2021. Creandum and Bpifrance invested at the seed stage and Swan was originally part of the eFounders startup studio.The basic premise of Swan is that any company can create payment accounts and add financial products to their existing services using Swan. Swan partners with SaaS companies, marketplaces and even other fintech startups so that they can offer white-labeled banking features. Clients include Carrefour, Pennylane, Alma, Agicap, Factorial and Expensya.

“We take on all of the banking ops and risk for our customers, so they don’t have to worry about it and can focus on building the best product,” co-founder and CEO Nico Benady said.

Each payment account comes with an individual IBAN — this IBAN can be localized for French, German and Spanish customers. Swan then supports pay ins and pay outs from these accounts as well as SEPA direct debits.

“We launched SEPA pay in and out in 2021 and have improved it over time. Everything is built in-house, and this year we added SEPA Direct Debit to the mix,” Benady said. “It’s important to me that Swan builds as much as possible ourselves, close to the metal. It’s because of this ownership that we enable the best quality end-user experience.”

When it comes to cards, Swan can be used to generate both virtual and physical cards that work with Apple Pay and Google Pay. Everything can be configured, such as maximum amounts, currencies, authorized merchants, etc.

Swan has 100 customers that have processed over €7 billion worth of transactions. With today’s funding round, the company wants to double down on its core strengths. Swan will add more payment collection methods, such as direct debits and card payments. The company is also looking at lending capabilities in the future.

New local IBANs are coming soon, such as account numbers that start with NL and IT for the Netherlands and Italy. The startup will then try to onboard new customers in those two European countries.