Lakestar, the early investor in Revolut, takes the lead in a $40 million investment round for Swan

European venture capital giant Lakestar, an early supporter of fintech unicorn Revolut, has emerged as a prominent backer of French fintech startup Swan.

Swan raised the funds in a series B investment led by European venture capital giant Lakestar. The latest fundraise takes Swan’s total money raised to 58 million euros. Accel, another venture capital firm, previously led Swan’s series A round in 2021.

The integration of banking and financial services into existing platforms without any financial components was “incredibly complex” when Swan CEO and co-founder Nicolas Benady started out.

“What we had in mind with our co-founders was that it shouldn’t be that complex,” he told CNBC. “If it’s easy to accept payments — like the Stripes the Adyens, the Mollies of this world enable — it should be as easy to set up banking.”

“If you develop a big idea … at 2 a.m., it should be possible to come onto our website and have something up and running in the morning,” Benady added.

Swan plans to expand its operations in the Netherlands in the coming months, followed by the Italian market in 2024.

The Dutch market presents unique challenges in launching digital banking and payment capabilities due to its own payments system called iDEAL.

Lakestar has been tracking Swan for about a year and is impressed by their focus on empowering clients to create new revenue lines without the burden of regulatory compliance.

Swan differentiates itself from competitors by offering more automated compliance processes, allowing them to handle large volumes of payments.

The company also plans to forge partnerships with large corporations and broaden its product offering to include more payment collection methods and lending capabilities.

The embedded finance market is expected to grow significantly in the coming years, reaching $384.8 billion by 2029.