"The FinTech sector has become one of the fastest growing segments on the web", Geoffroy Guigou (H.03), co-founder of Younited Credit

25 November 2015

As part of the first HEC recruitment forum dedicated uniquely to FinTech professions - firms using these brand new technologies to offer out their financial services - the founder of Younited Credit (the leading peer-to-peer lending company), gives us his analysis of a rapidly expanding sector. 

Geoffroy GUIGOU Co-fondateur & Directeur Général de Pret d'Union

Younited Credit (previously Prêt d’Union) is the leading peer-to-peer lending player in France, and the only one in Europe with a full credit institution license. Incorporated in October 2009 with 3 HEC as co-founders (Charles Egly & Geoffroy Guigou, H03, with Donald Bryden H74 as the Chairman of the Board), launched in December 2011, the company has already originated 250 M€ in loans and has 100 employees. Younited Credit is still experiencing a 100% annual growth rate, and is about to expand across Europe (Italy Q1 2016, then Spain will follow). Having raised 18 M€ during the 2009-2014 period, a new fundraising round of 31 M€ occurred in July 2015, led by Eurazeo, one of the top listed Private Equity fund in Europe. Shareholders also include Credit Mutuel Arkéa, Schibsted Growth, AG2R La Mondiale, Weber Investissements and Kima Ventures.

Should we consider FinTech as a revolution, destoying old business models, or just as the financial industry moving digital ?

At first sight, the FinTechs are a revolution due to the scale of the threat that these new entrants represent for banks. McKinsey estimates that between 20% and 60% of retail banks’ market, in their 5 principal lines of trade, will be captured by 2025 by the Fintechs (Global Banking Annual Review 2015 ) – that’s an enormous amount! Especially when you think that a few years ago, no sector analyst predicted that they would go beyond 2-5% of the market... It is funny to think that when we created Prêt d’Union in October 2009, the term ‘FinTech’ didn’t even exist in the United States. In Europe, it’s only 18-24 months since it became a common name.

But, more than any other sector of activity facing digital transformation, the new entrants in the banking sector need to ally themselves with traditional actors. Why? Quite simply because we are in a regulated sector, and it is necessary to have approval, or banking licenses in order to be able to operate on several markets. At Younited Credit, we have make the unique choice in Europe of obtaining our own Credit Institution approval (it’s been 15 years since a French start-up has been able to obtain this approval), so in this respect, we haven’t needed a partnership with a bank, contrary to the vast majority of FinTechs. Nevertheless, we have established numerous partnerships with traditional actors: Crédit Mutuel Arkéa is by far the most important one in the shareholding; but Generali also distributes our product brand integration via its network of financial advisors, AG2R La Mondiale is a financial partner, the Banque Postale assures some of our credit lines, the insurance product borrower that we are distributing is operated by Metlife 5one of our mutual American partners).

Thus, we can also say that the FinTechs are on the elements of the digital transformation of banks.

What are the economic perspectives for the FinTech sector and the opportunities in terms of career?

The FinTech sector has become one of the fastest growing segments on the web, since the banking secotr is one of the last domains which has not yet been radically transformed by the internet. According to Forbes magazine, the investment of venture capital in the FinTechs thus passed $3 billion in 2013, and $12 million in 2014.

As a consequence, career opportunities have multiplied, as much in France as abroad. In the United Kingdom, Prime Minister Cameron committed this summer to helping FinTechs to create at least 100,000 jobs in the next 3 years. Concerning Prêt d’Union, a start-up which has the largest number of collaborators of the FinTechs in France, the number has gone from 7 to 100 in less than 4 months.

Can you describe to us your journey and the reasons which have pushed you into entrepreneurship, and in particular in the crowdfunding sector?

When Charles and I created Prêt d’Union in October 2009, very quickly joined by Thomas Beylot, we were 30 years old and had worked for 7 years (McKinsey then Poweo-Direct Energie for me, and BNP Paribas in Private Banking/Asset Management/Credit Derivatives for Charles), since leaving HEC in 2003. Donald Bryden, President of the Surveillance Council, has managed numerous banking establishments, and was played a significant role worldwide in Corporate Finance and was a member of the Executive Committee of the Royal Bank of Scotland Global Banking and Markets.

What pushed us to be entrepreneurs? Firstly the thrill of the challenge! It is very exciting and stimulating to be part of a ‘blank sheet’, especially when it’s a case of standing up to the dinosaurs that are the banks. Experiencing a thrilling, human adventure and also one of the motivations for entrepreneurship: we are weaving extremely strong links between associates of course, but also with all of our collaborators (100 to this day), as well as with our financial partners and shareholders. I believe that our greatest satisfaction is seeing former employees of Prêt d’Union building their own business afterwards.

You have just announced that you have raised €31 million. What are your axes of development? Is the European market ready to host a Lending Club?

We have effectively announced this summer a fundraising of €31 million, subscribed to by our historical actions, as well as 2 new shareholders: Pierre Kosciuzko-Morizet and Eurazeo. This new round table, will allow us to develop our model on the international stage: in March we will launch in Italy, and will do so in Spain afterwards. Prêt d’Union will also become the principle pan-European platform for personal loans.

It is certain that there will be a European “Lending Club”, and our banking approval (we are the only European platform available) puts us in an excellent position for the future

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