Swedish fintech startup Froda has successfully raised $22.7 million (€20 million) in a Series B funding round led by Incore Invest, a fellow Swedish investment firm. This significant investment underscores the growing momentum in the embedded finance sector, even amidst a general slowdown in fintech investments.
Froda specializes in providing debt financing solutions tailored for small and medium-sized enterprises (SMEs). By integrating its services into various platforms, such as marketplaces and payment systems, Froda offers seamless financial support to businesses. Currently, the company operates primarily in Northern Europe, spanning from Finland to the United Kingdom. The newly acquired funds are earmarked for expanding Froda’s services across a broader European landscape.
The company’s innovative approach involves assessing an SME’s cash flow through direct analysis of their bank accounts. This method enables efficient and accurate lending decisions, ensuring that businesses receive the financing they need based on real-time financial data.
Olle Lundin, co-founder and CEO of Froda, highlighted the company’s mission, stating, SMEs are a really underserved sector in Europe… and we’re doing that in a way which sets up great terms for the SMEs… and also we are providing a fantastic user experience, which means that an SME will always have access to financing.
Froda’s growth trajectory is impressive, with a reported 30% year-over-year increase in customer acquisition as of 2024. Additionally, the company is consistently forming new embedded partnerships, averaging one per month.
In the competitive landscape of SME debt financing, Froda stands alongside companies like ULend in Brazil, Liberis in the United States, and Bankxware in Germany, all of which are dedicated to supporting small businesses through innovative financial solutions.
