The digital lender recently became the first company to establish an EU-wide microfinance partnership with the European Investment Fund aimed at closing a €400bn funding gap for small and medium-sized businesses.
Froda, a Stockholm-based fintech, has raised €20m to expand its data-driven financing platform for small and medium-sized companies in Europe. The fundraising round was led by Swedish investment firm Incore Invest, with “strong continued” support from most of its existing investors, Froda said.
Founded in 2015, Froda has developed a finance platform for SMEs that has shortened the loan process from months to minutes, making financing more accessible. It is currently present in the Nordics, the UK, Ireland and Germany, partnering with companies such as Visa, the world’s largest payments network operator, UK fintech Checkout.com and Nordic digital bank Lunar.
“We’re in the middle of a pivotal growth phase for Froda, and seeing strong demand from both new and existing partners across Europe. With Incore Invest’s backing, we can accelerate our growth and scale our partnerships to continue supporting SMEs with the financing they need,” said Olle Lundin, co-founder and CEO at Froda.
The money will be used to scale its operations, sign up new embedded finance partners and expand into additional European markets, Froda said.
European investment
The funding round was completed despite a slowdown in fintech fundraising, according to Froda. “The investment underscores growing investor confidence in embedded finance as a model for scalable and sustainable fintech growth,” Froda said.
In February, the European Investment Fund (EIF) approved a new guarantee facility for Froda, unlocking €100m in lending for micro-entrepreneurs in various EU member states to take its total commitment to the Swedish fintech to €150m. The transaction was the first pan-European microfinancing guarantee of its kind, and contributed to EIF’s goal to bridge a €400bn SME funding gap in Europe.
“At Incore Invest, we look for businesses that are not just disrupting markets but fundamentally reshaping them. Froda is a prime example of this. Its strong business strategy, impressive growth trajectory and industry-leading partnerships make it a standout investment for us,” said Nicolai Chamizo, founder and CEO at Incore Invest.
