Important points about the Belgian FinTech market
Most experts agree: FinTechs need demand, talent, capital and regulations.
In other words, end-user demand must exist for their services -- in Belgium, particularly in payment services, there is user demand, but adoption of FinTech solutions is low. Belgians are looking for better customer experience, perhaps because customer service from traditional financial services organizations is so poor in Belgium. Belgium, as the "Heart of Europe", provides easy access to larger markets for FinTechs which can scale beyond the Belgian marketplace. Some Belgian payment FinTech examples are Ogone (acquired by Ingenico) and Zoomit, which are household names with high adoption rates. But many Belgian FinTechs are focusing on the B2B market rather than the B2C market. But, many have already scaled outside of Belgium to neighboring countries or the US.
Talent is available in Belgium: look at the human resources from a country with organizations like SWIFT, EuroClear, MasterCard, BankSys, Clear2Pay, and ATOS Worldline. Yet, the Belgian attitude towards entrepreneurial activities is quite poor. Social protection for employees is strong, and the main alternative is to be "independent" not to start up one's own company. Most Belgian employees prefer to switch between large corporations offering job protection besides the strong legal protection of employees, rather than going out on their own. This is also true for recent graduates who tend towards corporations rather than entrepreneurship. Of course, there are exceptions to this generalization, but the number do reflect that there are not a massive amount of Belgian FinTech startups, nor startups in Belgium in general.
Belgium lags behind other countries in Europe for capital that is available to startups, but this is changing, with an estimated doubling of funding between 2015 and 2016, but the total amount of funding is still low compared to other European countries. Seed funding is available but further funding is harder to find, which is one reason that Belgian FinTechs often expand to the US. In the following sections, we note Belgian FinTechs which have succeeded in getting some reasonable seed funding, Series A funding or been acquired.
Government policies and laws are not conducive to startups. Administrative and tax burdens remain high. Taxation rates are close to 60%, which makes it difficult for startups to hire and grow.
Where do you find FinTechs in Belgium?
Most Belgian FinTechs are located in Brussels, but there are a few spread around the periphery of Brussels in towns such as Mechelen or other Belgian cities like Antwerp, Ghent and Liege. Also, as mentioned in the introduction, some Belgian FinTech entrepreneurs have left Belgium altogether for opportunities in the UK and US.
So, who are the hot in Belgian FinTechs?
Here are some of the hot names in Belgian FinTechs.
Monizze was founded in 2011. Monizze provides solutions to digitalize meal vouchers, eco-cheques and gift cards. In June 2015, Monizze joined the French UP Group. During 2016, Monizze had over 10.000 customers and 200.000 beneficiaries for its digital meal vouchers, eco vouchers and gift vouchers: all are important in the Belgian employment market as a high percentage of employees receive at least one of these types of benefits, and most receive more than one type. During 2016, Monizze acquired European Payment Solutions
Founded in 2013, Cashforce brings a company's financial information together to analyze future cash flow concerns. This allows CFOs to create cash flow forecasts. Cashforce handles various set-ups for ERP system and Treasury Management systems, as well as various treasury configurations. Cashforce allows CFOs to have visibility on the cash flow across the organization. CashForce is a good example of one of the Belgian FinTechs that have migrated to the US for better access to funding, in which they obtained over one million euros in Series A funding in early 2016.
Doccle is a collaborative platform onto which partners load documents such as invoices and payslips, and allows retails customers to connect in and request e-documents from the partners. The system also performs archiving so that users always have access to the information that was provided to them via the platform.
In 2013, Twikey was one of the finalists in the SWIFT InnoTribe Startup Challenge. Twikey offers automatic payments for recurring customers. It allows companies to manage electronic mandates (for example, for SEPA Direct Debits) and contracts. One driver behind Twikey is the regulatory requirements that are pushing mandate management across Europe. e-Mandates can be loaded from existing bank, ERP and customer relationship management systems.
SilverFin claims to help accountants work smarter by increasing efficiency, reduce human error and become a trusted advisor. Silverfin provides an online platform for accounting. SilverFin's platform is used by more than 50.000 companies and also links with accounting firms. SilverFin was funded for 4.5 million dollars in Series A in early 2017.
After three rounds of funding to the tune of 10 million dollars, Xpenditure was acquired by Sodexo in early 2017.
Xpenditure aims to automate and improve processing of business expenses. Xpenditure provides mobile and web apps to streamline current paper-based expense reporting by allowing employees to photograph expenses while travelling, and having the receipts "read". While based in Belgium, Xpenditure also has offices in other locations in Europe and the Americas.
Founded in 2015, The Glue has developed a solution that is based on in-memory grid computing and is a framework for banks. The Glue has recently (early 2017) received funding of 5 million euros. The goal of The Glue is to allow banks to develop new services based on a customer-centric focus. The services are offered by overlaying traditional, legacy systems within the bank.
Swanest was founded in 2014; they provide technology for self-directed investors allowing them to define their own investment strategies. Swanest incorporated in London to have access to the UK investment market and funding opportunities, such as seed funding of 750 thousand euros in late 2016.
IbanFirst was founded in 2012. IbanFirst offers foreign currency payments for international companies at market rate through its online multi-currency platform in Banking-as-a-Service mode. Also, international payment services are available. In 2015, IbanFirst's platform processed more than 1 billion transactions for 1,000 active companies, and completed more than 100,000 operations.
IbanFirst had an investment round of 10 million euros in late 2016.
Sign2Pay was founded in 2013 and provides a mobile payment solution. The app allows payments based on bank account number and signature for online payments. The goal being more online sales conversions. Sign2Pay analyzes the signature to ensure the identity of the user. Sign2Pay had angel investing of 600 thousand euros back in early 2015.
QOVER is a new company that was founded in 2016. QOVER focuses on “Sliced On-Demand” insurance offerings. QOVER looks at providing customized and unique insurance offerings based on customer's needs and budgets. QOVER had seed funding of 1.5 million euros in early 2016 from, among others, Callatäy & Wouters Ventures, with a Series A round of 5.5 million euros in early 2017.
Created in 2007, Gambit Financial Solutions focuses on business solutions for investment advice. From academic roots at the University of Liege, Gambit continues to work with academia for innovation. The solutions are used by institutions in Belgium, Luxembourg, Switzerland and France.
Belgian FinTech = PayTech
So while you find exceptions to the rule, most Belgian FinTechs focus on the payments arena. As mentioned, this is due to Belgian user demand coming in payment services, and especially the B2B market. Besides payments, Belgian FinTechs are providing solutions for investment advice or, more rarely, in InsurTech.
--> See an overview of the current Fintech job openings in Belgium