Toscafund invests 25 mln euros in Lemon Way

Toscafund invested 25 million euros in Paris-based Lemon Way, a regulated payment solutions provider. Goodwin Procter LLP and Proskauer Rose LLP advised Lemon Way and Toscafund, respectively, on the deal.

PRESS RELEASE

Pan-European payment processor Lemon Way, managing over 7 million payment accounts, announces today the signing of a €25 million investment from Toscafund Asset Management LLP (“Toscafund”), the London-based specialist financial services investor. The transaction, which is subject to customary regulatory approvals, marks Toscafund’s first private equity investment in France.

Established in 2007, Lemon Way is a Paris-based regulated payment institution dedicated to the highly complex and fast-growing sector of marketplaces, crowdfunding platforms and e-commerce websites that require payment processing, wallet management and third-party payment services in a KYC/AML-regulated framework. Lemon Way differentiates itself by offering an all-in-one solution of modular and proprietary API-based services ranging from on-boarding to cash pay-out flows. In addition, Lemon Way intends to collaborate with banks, forging strategic partnerships aiming to provide flexible cutting-edge customised solutions to banks’ marketplace and e-commerce customers. The company currently has active partnerships with several major European financial institutions and aims to broaden its scope in the next few years.

So far, more than 1400 European marketplaces, including 200 crowdfunding platforms have been drawn by Lemon Way’s services. Since December 2012, the company has registered 120 platforms as payment agents with the ACPR – Banque de France.

In 2018, the company handled total business volume of €1.9 billion in flows, due to the strength and breadth of its proposition and the natural growth of its partner platforms. The company has continued its growth trajectory, expecting to process transactions in excess of around €3 billion by end of 2019 (58% growth).

This new fundraising will enable Lemon Way to develop its products, through modular proprietary APIs and new payment services in line with the complex requirements of its clients. Already operating in 12 European countries, the company is well established in France, Italy and Spain, and will strengthen its presence in the United Kingdom and Germany to become one of Europe’s leading payment institutions for marketplaces.

“We are pleased to have found in Toscafund a strong and internationally experienced partner which is complementary to our first-round investors Breega and Speedinvest. The investment provides us with substantial additional resources, allowing us to bring the company to the next level,” says Antoine Orsini, CEO and co-founder of Lemon Way. “Toscafund is a leading investor in financial services and has a great understanding of the benefits of operating within a regulated framework. This funding round will help us improve our technological platform and finance our geographical expansion,” adds Damien Guermonprez, Executive Chairman of Lemon Way.

Fabrizio Cesario, Partner at Toscafund, said: “We are delighted to join Lemon Way’s existing shareholders and support the founders with our capital and expertise in European financial services. Building on Toscafund’s established track-record in providing capital to successful entrepreneurs, this investment is perfectly in-line with our mission to support companies taking advantage of technological change to disrupt the financial services industry.”

“Lemon Way’s target market is booming: B2C, B2B and financial online marketplaces are emerging all over Europe and are expected to continue their strong growth trajectory,” adds George Koulouris, Partner at Toscafund. “Lemon Way’s technology, strong partnerships and differentiated expertise give the company a head start”.

Lemon Way and Toscafund were advised by law firms Goodwin Procter LLP and Proskauer Rose LLP, respectively. This transaction follows the company’s €10m Series A fundraising in July 2018 led by venture capital funds Breega and Speedinvest.

About Lemon Way:
Lemon Way offers a regulated payment solution dedicated to marketplaces, crowdfunding platforms and e-commerce sites as well as financial services companies requiring payment and fundraising services on behalf of third parties within a secure and regulated framework (including KYC and anti-fraud services). Lemon Way was licensed by the ACPR/Banque de France as a Payment Institution in 2012 and has a “financial passport” in 29 countries. The company is based in Paris (head office), with offices in London, Madrid, Milan. It employs 70 people representing 14 different nationalities.

For more information visit: www.lemonway.com / Twitter @LemonWay

About Toscafund Asset Management:
Toscafund Asset Management LLP is a London-based multi-asset alternative investment management firm with over $3.5 billion in assets under management. Founded in 2000 by Martin Hughes, Toscafund has firmly established itself as one of Europe’s leading investors in the financial services sector across both public and private markets. Alongside Tosca, the global financials equity fund, the firm’s other funds include long-only activist equity, UK small-cap equity, private credit, and commercial property.

Toscafund has a long track record of supporting management teams and providing growth capital to private companies. Notable private investments in financial services companies include Aldermore Bank, Hoist, Atom Bank, OakNorth, Esure, Plurimi Wealth, LIQID and Caravela Companhia de Seguros