Hero, a new fintech startup based in Paris, is announcing an €11.3 million all-equity funding round led by Valar Ventures ($12.2 million at today’s exchange rate). For the past couple of years, the company has been quietly building an ambitious banking product for small companies that can essentially replace everything you’d expect from a traditional bank, from managing money to accepting payments and getting a credit line.

When you start a company in France, it has become quite easy to register it and get a bank account under your company’s name. At the same time, a bank is so much more than just an IBAN and a debit card.

Running a company often means that you also need to accept payments in one way or another. And if things are going well — especially if you’re selling goods — you might need to finance your next inventory purchase and pay your 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-based company that is willing to provide short-term loans to small companies — in France, there are Silvr, Defacto, Karmen, Unlimitd, etc. Alternatively, they can negotiate with a traditional bank to get a loan.

Hero wants to aggregate those tech and financial services into a single product. Customers can use the product to send, receive and hold money with multiple accounts and IBANs. The startup also offers payment cards.

The company has built its own core banking system. While many fintech startups partner with Swan for the financial infrastructure, Hero doesn’t rely on a banking-as-a-service partner.

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

Hero mostly plans to make money with its credit offering. You can submit a supplier invoice to Hero so that they pay it for you right away. You then have up to 90 days to pay the bill.

Similarly, you can submit your own invoices that you’ve already sent to your clients and get the money in advance. You don’t have to worry if your client is going to pay you next week or next month. In both cases, Hero customers will have to pay interests on these credit products.

Hero’s founder and CEO Roland Jais-Nielsen already knows why cash flow issues can really hurt a business as he previously founded Merci Handy, a brand of fancy hand sanitizers and cosmetics.

The startup has developed its own risk scoring engine to assess a client using both public and private data. Hero decides whether it wants to provide financing to its customers, but the startup has created a debt fund with a financial partner — unfortunately it isn’t sharing more on this front.

Hero had previously raised a €7 million funding round in 2022. SquareOne, an investor in this initial funding round, is also participating in today’s new funding round.

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