Continuing the series of Computer Business Review’s profiles of European high flyers we examine the prospects for the French online software banking vendor, CosmosBay.
In 1989, a group of executives from Europe’s largest provider of interactive entertainment software, Infogrames, decided to take an entirely new direction. The huge success of the French video- text-based online service Minitel convinced them that the provision of online services was a burgeoning market. But rather than stick to the consumer market in which they were understandably experienced, they decided to strike out and target the business world. As a result, they established CosmosBay, an online banking software vendor. Today, CosmosBay is a leader in France in the area of online banking services. Among its customers are some of the country’s leading financial institutions. Credit Agricole, Credit Lyonnaise, the Banque Nationale de Paris, France’s Ministry of Finance and CNP, the country’s largest insurance company, are all on CosmosBay’s growing customer list. The company’s flagship product is Banking Suite, a software package which enables the development of secure customer online banking applications which support multiple communication channels including the web, IVR interactive voice response, fax and Videotek. In addition, the CosmosBay Online Manager provides users with banking application deployment, maintenance and administration capabilities. In 1996, CosmosBay’s revenues were in the range of $3m to $4m, and the company’s chief executive and founder, Franck Simon expects them to rise to $5m in 1997, as increasing numbers of banks and insurance companies start to do business online, in response to the growing competition from non-traditional providers of financial services such as retail companies and computer specialists. Although still small – the company currently employs just 40 people – CosmosBay is now setting its sights on an expansion into the global marketplace.
To that end, in addition to its headquarters in Lyon, France, it has established offices in Paris, Boston and London. It already boasts customers across the globe in Israel, North Africa, Switzerland, Italy and Belgium. The growth of CosmosBay was greatly boosted by an initial round of venture capital funding from Atlas Venture and Sofinnova in July 1996, which netted $1m for the company. A second round of funding, dedicated to launching CosmosBay in the US, is planned for April 1997. Making headway in the US is likely to prove CosmosBay’s most significant challenge to date but, according to Franck Simon, CosmosBay is already accustomed to competing against some pretty fierce competition. The company’s main competitor in France, for example, is systems giant IBM Corp. However, the nature of the online banking marketplace is about to change fundamentally, according to analysts. They predict an explosion in online banking and say that the scale of the opportunity will entice many new and established suppliers to enter the field, creating a fiercely competitive marketplace. While CosmosBay’s early entry into the market puts it in a good position, long-term, international success, at this stage, is far from guaranteed.