heroa new Paris-based fintech startup, announces a €11.3 million funding round led by… Valar projects ($12.2 million at today’s exchange rate). For the past two years, the company has been quietly building an ambitious banking product for small businesses that can essentially replace everything you’d expect from a traditional bank, from managing money to accepting payments to having a line of credit.

When you start a company in France, it is very easy to register it and obtain a bank account in your company name. At the same time, a bank is much more than just an IBAN number and a debit card.

Running a company often means you also need to accept payments in some way. And if things are going well — especially if you’re selling merchandise — you may need to finance your next inventory purchase and pay suppliers in advance.

The result is that small business owners often have to deal with a myriad of fintech products. They also have to find a revenue-driven company that is willing to provide short-term loans to small businesses – in France, there is Silver, In reality, Carmen, Unlimitedetc. Alternatively, they can negotiate with a traditional bank for a loan.

Hero wants to bundle those technical and financial services into one product. Customers can use the product to send, receive and hold money through multiple accounts and IBANs. The startup also offers payment cards.

The company built its core banking system. While many fintech startups are collaborating with… Swan For financial infrastructure, Hero does not rely on a banking-as-a-service partner.

Retailers can choose Hero as a payment solution using an API, e-commerce platform plugin, or payment links. On this front, the startup is relatively attractive compared to Stripe where transaction fees start at 0.4% + €0.15 per transaction.

Hero mostly plans to make money through its credit offers. You can send the supplier invoice to Hero so that they will pay you immediately. You then have up to 90 days to pay the bill.

Likewise, you can send your own invoices that you have already sent to your clients and get paid up front. You don’t have to worry if your client will pay you next week or next month. Either way, Hero customers will have to pay interest on these credit products.

Hero’s founder and CEO, Roland Jais-Nielsen, already knows why cash flow issues can really hurt a business, having previously founded Merci Handy, a luxury hand sanitizer and cosmetics brand.

The startup has developed its own risk scoring engine to evaluate a customer using public and private data. Hero is deciding whether it wants to provide financing to its customers, but the startup has set up a debt fund with a financial partner — and unfortunately, it’s not sharing more on that front.

Hero previously raised a €7 million funding round in 2022. SquareOne, an investor in this seed funding round, is also participating in the new funding round today.

It will be interesting to see if Hero’s focus on building everything in-house will provide an advantage over other financial companies. It also creates some challenges. For example, the company is still waiting for regulatory approval from ACPR for its payment services.

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