Luko alumni raise €25m from Balderton and Ribbit Capital as B2B fintech reigns

Two former Luko employees have raised €25m in funding for their automated financial management startup Payflows. 

Balderton Capital led the Series A round, which also saw participation from existing investors Ribbit Capital, Headline, 20VC and French shopping mall Galerie Lafayette’s family office. 

Cofounders Pauline Glikman, formerly VP of operations at Luko, and Joseph Assouline, who headed up machine learning operations at the recently-acquired French insurtech, started working on the startup in 2022. 

That year, Business Insider reported that the French startup raised a $5.5m seed round co-led by US firm Ribbit Capital and Headline, but the figure was not confirmed. The €25m announced today includes Payflows’ seed round. 

What are they working on? 

Currently, company CFOs typically have to become acquainted with a myriad of different systems to have visibility on their organisation’s finances. With different tools for tracking functions such as treasury management, procurement and cash collection, finance teams are often forced to work in silos or even pay consultant developers to maintain their systems, Glikman says.

“A lot of the software that’s been put into their hands is really difficult for employees to understand, in particular for employees beyond the accounting team” she tells Sifted. “It’s been built by accountants for accountants.” 

Payflows aims to let finance teams keep track of all these processes in one easily customisable system. Rather than pushing entirely new infrastructure on CFOs, Payflows’ platform is deployed on top of companies’ existing accounting systems known as enterprise resource planning systems. 

Companies pay a subscription fee to use Payflows, which differs based on the size of the company and what modules they’ve signed up for. 

In particular, it’s targeting SMEs with employees above the 400 mark and has so far scooped up twenty clients, Glikman says.

“Follow the money”

Payflows’ funding round is the latest financing for fintechs hoping to make CFOs’ jobs easier. 

In February, N26 cofounder Maximilian Tayenthal took part in a €15m Series A round for Madrid-based treasury management Embat. And at the tail end of last year, former Swile and Qonto execs raised a €20m Series A for France-based Pivot, which is building software to automate procurement. 

The investor focus on the office of the CFO niche is the latest sign that it’s B2B and not consumer that’s in vogue in today’s fintech market. In the first quarter of this year, European fintechs catering to business clients raised $2.1bn — close to double of the $1.2bn funnelled towards consumer fintechs according to Dealroom. 

“For a long time VC focused on consumers and I personally wondered why,” says Rana Yared, the Balderton partner that led the Payflows deal. “The spending by consumers is dwarfed by the institutional and the B2B — this is a follow the money story.” 

Despite the hype from VCs, Kyriba, one of the later stage companies in the CFO tooling space, is yet to achieve a multi-billion dollar valuation. 

Much of this new funding round is earmarked for international expansion, Glikman says. Currently operating across the EU, the business is now eying opening up a UK office by end of the third quarter but it isn’t stopping at just a quick hop across the channel.

“We’re very excited about the opportunities beyond and, in particular, in the US” she says. “Much of this money is going to be about making sure that we’re US-ready.”