The investment will help advance Groov's goal of improving capital access for SMEs by offering optimal financing terms.
Groov views embedded finance as a key solution to the GBP 1.2 trillion global funding gap faced by SMEs. The company advocates for the development of Embedded Lending 2.0 to address this issue effectively.
The platform connects lenders to commerce platforms, such as vertical SaaS, through a single integration. This approach provides these platforms with various capital solutions, offering SMEs better terms and higher approval rates. It also allows lenders to reach a broader client base, reducing customer acquisition costs and sharing fixed expenses.
Groov plans to expand its lending offerings beyond merchant cash advances, to deliver more comprehensive, tailored financial products for SMEs. The new funding will primarily be used to improve Groov’s platform, further developing its orchestration layer for Embedded Finance, and supporting the company's multi-region and multi-product strategy.
The company is focused on integrating commercial lending products into platforms used by SMEs, ensuring that financial solutions are accessible and customised to meet their needs.
By embedding financial services directly into the platforms that businesses and consumers already use, companies can offer more convenient, faster, and customised financial solutions. This trend eliminates the need for traditional financial institutions, providing a better experience for customers and enabling businesses to better serve their audiences by addressing financial needs at the POS or service. With this model, the customer journey becomes more cohesive, as businesses can offer financing options, payments, and other financial tools without relying on third-party institutions.
The embedded lending sector, in particular, is seeing substantial growth as businesses recognise the value of offering capital solutions directly within their platforms. This model benefits both lenders and SMEs by simplifying the lending process and creating a more efficient ecosystem for accessing credit. Lenders can expand their reach, accessing a broader base of potential clients while reducing customer acquisition costs. SMEs, in turn, can secure financing faster, often with more flexible terms tailored to their specific needs. The shift towards embedded lending reflects the broader move toward digital financial solutions, where traditional banking models are increasingly being replaced by innovative, tech-driven approaches that better align with the needs of modern businesses and their customers.
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