Adrien Touati, CEO at manager.one, an online bank for businesses, recently talked with Louis Wapler (Senior Consultant, Paris). During their conversation, Adrien described the origin of manager.one, shared his views on the business banking industry and assessed the short-term lending solutions digital banks may provide to their business customers

1. Can you describe the origin of Manager.One?

I started my entrepreneurial life 10 years ago with a first exit in 2015. This experience has led me to interact with multiple banks, and the customer experience was never great. Opening an account has always been a cumbersome task requiring significant amount of paperwork. Traditional issuers have bulky onboarding processes that are time consuming. Time is a scarce commodity to any businesses, and banks should instead support entrepreneurs by optimizing their processes.

manager.one provides the services that I would have liked to have when I started my entrepreneurial life. manager.one started 6 years ago and aimed at providing bank accounts in a very short timeframe to all sort of companies from the self-employed to the large corporates. We are focused on the expense management side to enhance the customer experience with more than 50 features available on our card products.

All expense management features are built in-house. manager.one has its proprietary servers providing agility for the business users to set tailored payment controls. We can deliver card products with very strong control features such as payment limits per merchant, category rules (blocking certain type of merchants) or time rules (blocking certain transactions outside of business hours). Our goal is to help employees and companies to avoid spending time on expense management processes. In the near future, we look to implement additional features on our cards such as biometrics or public transport settings (integrating the Calypso protocol). This is where we believe the next opportunities lie and where more profitability can be added to our current business model.

2. How manager.one differentiates from other SME online banking offers seen on the market (e.g. Qonto, Kontist etc.) and why should a SME/self-employed consider manager.one when setting up a bank account?

manager.one is one of the two B2B digital player with a bank agreement (Memo Bank being the second one) serving the French market – others operate as payment establishments or via BaaS (Bank as a Service) models. manager.one provides a unique pricing model that is not based on the number of cards allocated to a company. We provide a flat monthly fee and do not invoice per user. manager.one issues the card with the most advanced technology and settings available in the French market.

We have a significant number of SME clients. Yet, we are not only seeking that profile of customers and are looking for all types of B2B clients. It can range from large corporates with significant card product needs to smaller companies with high volumes of expenses. I like to believe our value proposition lies in the level of settings and transparent pricing we offer to our business clients.

3. Some EU markets have robust credit card solutions for SMEs, enabling interesting short term lending propositions. Do you believe this would be appealing to French SMEs?

Yes, it would be for small businesses but not necessarily for the fintech that are serving that segment. Cash flow is the number one risk for small businesses. A recent study showed that more than 80% of small businesses in the US fail because of cashflow management in their first five years of existence. manager.one’s business is not to support the risk of SME business failures. Brex in the US market had to exit this business model in 2022 and dropped thousands of its small business customers to focus on bigger venture backed clients.

Providing cash to small businesses in order to gain market shares seems to be an irrational strategy in my opinion. It might be an interesting way for a fintech to grow and capture clients, but it is too risky in the long run. The way we do business is to provide tools to healthy companies, not cash advances with credit cards. When offering credit to a company, a due diligence has to be done, and not everyone has the ability to do it rigorously.

4. Can you describe the reason why SMEs have historically been underserved by traditional issuers?

Firstly, the SME segment is not known to be profitable in the B2B banking ecosystem. SME loans are risky. Traditional banks who want to target that segment will either create partnerships or buy a player serving that segment (e.g. Société Générale with Shine). In this industry, the rational is to earn money on the target. If not, it is a no-go. But the issue is that the market is made of more than 90% of SMEs in France – and some of those SMEs will be the big corporates of tomorrow. As an SME, there are a lot of options to select from the digital banks to the traditional banks, but SMEs will quickly understand traditional banks fail to provide the right tools for their business needs.

This market gap has enabled a plethora of new entrants that have tailored their value propositions towards small businesses. Today, SMEs are moving towards digital banks. The SME banking is a mass-market model, operating on thin margins and high volumes. Traditional issuers targeting large corporates do not need high volumes. A parallel can be done with private banking and other players (not a lot of clients, but a lot of money per client). It comes down to a question of choice and strategy.

Our strategy slightly differs from the rest of the market. manager.one leverages its expense management capabilities to issue a lot of cards, but the focus is not on a particular customer persona.

5. What are your hobbies? Are you reading any interesting books at the moment?

The Alternative Hypothesis from Eric Emmanuel Schmidt is a read I would recommend to any entrepreneur. Through that book, Schmitt defines the value of interactions and discussions and on the way those may change someone’s life. And I strongly believe this is the same in the business world. I also enjoy reading the news to stay tuned with my ecosystem.

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The content of this article does not reflect the official opinion of Edgar, Dunn & Company. The information and views expressed in this publication belong solely to the author(s).

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