Lemonway, the French marketplace payments specialist, has published very impressive results for 2023. In a press-release, Lemonway reported payment volume up 25% to €9.6bn while revenue doubled to €32m. Management says the business made a maiden operating profit of €5m.
Lemonway is getting better at converting payment volume into revenue. The take rate rose from 0.21% to 0.33% in 2023. The €1.9bn incremental volume gained in the last 12 months delivered an impressive additional €15.7m net revenue at a generous take rate of 0.83%.
Marketplace (sometimes called platform) payments is a complex domain. Critically, providers need to be able to onboard large numbers of sub-merchants, often in multiple jurisdictions, with each requiring AML/KYC checks. Marketplaces also require the ability to construct a single shopping basket with items from several suppliers, often in different currencies; calculate taxes and direct payments the right recipients.
There are several strong marketplace payment vendors based in France including MangoPay (now owned Advent which processed €12bn in 2022), and Limonetik, acquired by Thunes. But this is an increasingly competitive market. Stripe and Adyen also now have credible marketplace propositions.
Lemonway’s strong performance was driven by increased volume at a number of key customers including SNCF Connect, a service run by French railways which sells travellers tickets for train journeys throughout Europe. Lemonway has facilitated €4.3bn of transaction value so far.
Other customers include Billetweb, which supplies turnkey ticketing services to live venues, Decathlon which offers 3rd parties vendors the ability to sell on its website and Ecole de Ski Français for whom Lemonway onboarded 1,200 sub-merchants in a single project.
Although Lemonway offers a full PSP solution, the technology is modular, and customers can take all or part of the stack. For example, Ecole de Ski Francais uses Payplug for collections and Lemonway for managing payments between the sellers and purchasers.
Other partners include two large French banks. Lemonway is working with Société Générale to serve B2B marketplaces managed by the bank’s large corporate customers and AXEPTA, the payment acceptance spinoff from BNP Paribas.
Lemonway sees B2B marketplaces as a key growth area and has opened an office in Hamburg to help sell to German Mittlestand manufacturing companies.
Lemonway’s management is very confident about prospects for 2024, forecasting payment volume reaching €12bn. Having raised €50m from Breega, Speedinvest and Toscafund, the companys says it is now self-financing and has no need for further capital. There are few independents left in the marketplace payments sector. This makes Lemonway a prime acquisition target but, after its fine performance in 2023, any valuation will be at a significant premium.
