Froda raises EUR 20 mln to expand SME lending across Europe

The investment comes in the context of a wider downturn in fintech fundraising, highlighting ongoing interest in Embedded Finance models despite market headwinds. 

The newly secured funding will support Froda’s European expansion strategy. A part of the capital will be directed toward onboarding additional Embedded Finance partners, as well as entering new national markets across the continent. Froda provides integrated financing solutions for small and medium-sized enterprises (SMEs), allowing them to access funding directly through platforms operated by banks, neobanks and payment providers.

Continued expansion and EIF partnership

The company’s embedded model is designed to offer SMEs access to financing at the point of need, addressing what it identifies as a EUR 400 billion funding gap across Europe. Froda has recently formed partnerships with providers such as Mimo in the United Kingdom, Lunar in the Nordics, and Kontist in Germany. 

At the same time, Froda has extended its collaboration with the European Investment Fund (EIF), initiating what it describes as the first pan-European microfinancing guarantee programme of its kind. This partnership aims to replicate Froda’s lending model, first developed in Sweden, in wider European markets. According to the company, SMEs using its platform in Sweden have grown at a rate twelve times the national average. 

A representative from Froda noted that demand for the company’s services remains high among both new and existing partners, suggesting that the firm is entering a critical phase of growth. The new funding, the spokesperson said, will allow Froda to further pursue its objective of simplifying access to finance for SMEs. 

An official from Incore Invest stated that Froda aligns with its investment strategy, citing the company's business model and expansion plans as key reasons for their support. The fund, Incore Invest II, is focused on scaling high-growth companies in the fintech, SaaS, and Embedded Finance sectors.