Parafin startup raises USD 60 mln in series B

Tuesday 9 August 2022 12:57 CET | News

US-based Parafin, a fintech infrastructure startup helping companies launch and embed financial services for their sellers, has raised a USD 60 million Series B financing round led by GIC.

This round includes participation from new and existing investors, including Series A and Seed lead investors Thrive Capital and Ribbit Capital, bringing its total equity funding to USD 94 million. The company wants to make it simple and fast for any platform that serves a small business to offer financial products that accelerate their small business’ growth and increase their loyalty and value.

Currently, Parafin powers the embedded capital offerings of companies with over USD 100 billion in payments volume, including DoorDash Capital and Mindbody Capital. Companies that use Parafin together serve 700,000+ small and medium-sized businesses around the world. 

As representatives put it, it seems that small businesses have a huge, unmet need for capital and are poorly served by the status quo. Because Parafin is a vertically integrated, full-stack offering that manages all the aspects from product, underwriting, capital markets, compliance, to marketing for its partners, companies that serve small businesses can launch a white-labeled financial services program with Parafin a few days from start.

Future plans

With its new capital, Parafin intends to continue to launch new products for small businesses, such as business charge cards, and grow its market share in embedded financial services. They recognize the need of small and medium-sized companies for capital, and how hard it is for them to build financial products in-house. Therefore, the company is focused on solving hard infrastructure problems so that the platforms can serve their customers best.

US-based Parafin, a fintech infrastructure startup helping companies launch and embed financial services for their sellers, has raised a USD 60 million Series B financing round led by GIC.


Parafin is a full stack embedded financial infrastructure that serves small businesses. The company works with the platforms that small businesses already use, such as marketplaces, payment processors, and software providers. This is done with the intent of helping small businesses bridge their cash flow needs, invest in their growth, and run their business. Parafin was founded in 2020 by Sahill Poddar, Ralph Furman, and Vineet Goel, three of the earliest employees at Robinhood. Together, they served as the head of machine learning, first data scientist, and head of risk and fraud, respectively.

The fate of SME financing

In July we had the opportunity to talk to Jakob Pethick, CCO at Youlend, taking a look at the future of financing and how SMEs can capitalise on new lending opportunities. As we found out, the finance industry still relies heavily on backward-looking data, such as credit payment history or time trading. Many of these data points are unavailable to SMEs, or they do not reflect their ability to repay financing. Therefore, fundings are unfairly withheld from them.

Solutions like integrated data analysis between the finance provider and the PSP or marketplace allow for a more detailed financial assessment, resulting in higher acceptance rates. In addition, embedded finance can allow SMEs to apply for financing on the same platform where they conduct their daily business. The integration of data analysis also speeds up and simplifies the application process, allowing them to get an answer as soon as possible.

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Keywords: fintech, startup, funding, investment, embedded finance
Categories: Banking & Fintech
Companies: GIC, Parafin
Countries: United States
This article is part of category

Banking & Fintech




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