Press

Froda is launching its card-based embedded lending solution in Denmark together with Lunar and Visa. The launch follows a successful test period and the goal is to make it faster and cheaper for Danish small businesses to access financing and secure the necessary capital to drive growth.

Small and medium-sized enterprises (SMEs) make up 99 percent of all Danish businesses* and play a vital role in Denmark's economy and competitiveness. However, SMEs often face obstacles when in need of financing, which hinders their growth potential.

To address this, the Swedish fintech company Froda, in collaboration with Visa, has developed card-based embedded lending, a new loan solution that uses card rails for payouts and repayments. The solution is offered as a white label product through Froda Embedded to partners that are issuers of Visa business cards.

– It started with an idea and a sketch on paper more than a year ago, and now it has become a reality thanks to our partnership with Visa and Lunar. We have experienced a significant demand for the solution among Danish entrepreneurs during the test period, making Denmark a natural next step on our journey, says Olle Lundin, co-founder and CEO of Froda.

The process is fully digitized and by using Visa cards for payouts and repayments, the entire loan process can be shortened from the typical two months, to a few minutes. This breakthrough in the market ensures both speed and efficiency for small businesses when they are in need of financing.

– We are constantly working to find new, innovative ways to utilize the card infrastructure, including through strong partnerships. In collaboration with Froda and Lunar, we can digitize the entire loan process and ensure a seamless and fast process for the benefit of small businesses, says Philip Konopik, Regional Managing Director at Visa in Nordics and Baltics.

Card-based embedded lending was introduced earlier this year. With Visa's extensive presence in over 200 countries and territories, the product offers a consistent experience across markets, making it globally scalable. Lunar has become the pioneering partner to introduce this product to the Danish market.

– Lunar will be the first to launch an entirely new type of financing for small businesses in Denmark. It is easy to apply through our app, and you receive a non-binding offer within a few minutes. Additionally, we offer an attractive price guarantee, making our product extremely competitive and supporting our goal of building the best everyday bank in the Nordic region, especially for small businesses, says Anne Marie Kindberg, Chief Revenue Officer of Lunar Group.

During the spring, a selected group of Lunar's Danish customers had the opportunity to test a beta version of the product. The results were positive, with over half of the customers expressing great interest in this financing solution.

– It is fantastic to see such interest in the product. It demonstrates a clear need for innovative financing solutions. The partnership with Visa and Lunar has significant potential and enables us to expand our offering with business loans across markets, says Stella Snickare, VP Froda Embedded.

The product will be available to all Lunar customers in Denmark from the 20th of June. Lunar is building the best everyday bank for private and business customers and aims to make running a business in Denmark easier. The partnership with Visa and Froda aims to increase financing options, particularly for smaller businesses.

* SMV Denmark: https://smvdanmark.dk/analyser/temaanalyser/smver-er-rygraden-i-dansk-erhvervsliv

About Lunar
Lunar is a digital challenger bank with a mission to simplify and enrich people’s financial lives, empower them and put them back in control by building the best everyday Nordic bank. Lunar was founded in Aarhus and currently employs around 450 people in Copenhagen, Aarhus, Stockholm and Oslo. In 2019 Lunar received a banking license and is now one of few banks with a Nordic banking platform. Today more than 700,000 private and business customers across the Nordics use Lunar.

About Visa:
Visa (NYSE: V) is a world leader in digital payments, facilitating transactions between consumers, merchants, financial institutions and government entities across more than 200 countries and territories. Our mission is to connect the world through the most innovative, convenient, reliable and secure payments network, enabling individuals, businesses and economies to thrive. We believe that economies that include everyone everywhere, uplift everyone everywhere and see access as foundational to the future of money movement. Learn more at Visa.co.uk.

About Froda:
Froda was founded in 2015 with a clear idea - to provide small and medium-sized businesses with the same opportunities to grow as large companies. The company's service makes it smooth and affordable for entrepreneurs to invest in their ideas. By digitizing the process, Froda has made it possible to help more businesses with financing tailored to their unique operations and needs. Simply put, it's a smarter business loan.

Today, Froda is one of Sweden's fastest-growing fintech companies and has helped over 50,000 businesses grow. The company is a credit institution covered by the state deposit guarantee and is under the supervision of the Swedish Financial Supervisory Authority (FI).

Froda, the rapidly growing Swedish fintech company, has announced its expansion into the UK, marking another milestone in its growth trajectory. Froda has lent out more than 6.5 billion SEK since its inception and with the UK expansion, the company that reached a 1.2 billion SEK valuation this autumn, is now operating in five markets: the UK, Norway, Denmark, Finland, and Sweden.

The company's foray into the UK market comes as a result of a strategic partnership with Sweden-born financing fintech Treyd, which has been established in the UK for a year, aimed at simplifying and enhancing growth financing for merchants involved in the import and sale of physical products. This innovative collaboration empowers Froda and Treyd to provide merchants with financing solutions for inventory purchases, offering improved predictability, scalability, and flexibility through the integration of smart credit algorithms, data analytics, and advanced technology.

– Expansion beyond the Nordics has always been a key objective for us. In the current global landscape, it is crucial for merchants to access flexible financing options. With this solution, we aim to make it easier for entrepreneurs to unlock essential growth capital, says Olle Lundin, CEO of Froda.

Historically, accessing business financing for SMEs has posed significant challenges due to lengthy approval processes, in-person meetings, and time-consuming administrative tasks. Froda was founded with the aim of changing this and thereby contributing to a more equal and inclusive business environment, where businesses can access capital to grow through completely objective and digital assessment.

Since its inception in 2015, one of the goals has been to expand internationally to help entrepreneurs on a global scale. One step in that direction is to expand together with partners. In 2020, Froda established a dedicated business unit focusing on embedded finance, and the collaboration with Treyd exemplifies this strategic direction. In addition to Treyd, Froda has formed partnerships with renowned organizations such as Lunar, Yabie, and Worldline. Furthermore, earlier this year, Froda successfully launched a groundbreaking card-based embedded lending product in collaboration with Visa.

– With our Embedded Financing product, we can empower growth-oriented companies to offer their customers flexible financing solutions seamlessly integrated via a simple API. Our partnership with Treyd enables us to scale up and extend our financing solution to a broader network of merchants. Having already introduced the product in Sweden, Norway, and Denmark, we eagerly anticipate its reception in the UK, says Stella Snickare, VP Froda Embedded.

About Treyd:
Treyd is a fintech company that helps merchants grow by selling first and paying the supplier later. With easy and seamless financing of merchandise purchases, businesses can get discounts, free up working capital for investment in growth, and use cheaper and greener logistics. Treyd has 57 employees with headquarters in Stockholm and offices in London and Cairo. treyd.io

About Froda:
Froda was founded in 2015 with a clear idea - to provide small and medium-sized businesses with the same opportunities to grow as large companies. The company's service makes it smooth and affordable for entrepreneurs to invest in their ideas. By digitizing the process, Froda has made it possible to help more businesses with financing tailored to their unique operations and needs. Simply put, it's a smarter business loan.

Today, Froda is one of Sweden's fastest-growing fintech companies and has helped over 50,000 businesses grow. The company is a credit institution covered by the state deposit guarantee and is under the supervision of the Swedish Financial Supervisory Authority (FI).

Access to financing has long been a major hurdle for businesses eyeing growth. Against this backdrop, Visa, Froda and Lunar are announcing a global partnership and launching a new, innovative technology aimed at resolving these issues – for good. The product, which for the first time utilizes push-payment functionality for financing, aims to reduce transaction times to mere seconds. Ordinarily, this process would have taken months.

The fintech company Froda has formed a partnership with Visa to develop a brand-new loan solution for businesses. Initially, Froda and Visa are joining forces with the Nordic digital bank Lunar. Within the framework of the partnership, Lunar’s customers gain access to business loans through Froda’s proprietary embedded lending platform, featuring direct payments and repayments via Visa’s card. Visa’s presence in over 200 countries and territories provides a consistent experience regardless of market, making the product globally scalable.

– I am thrilled to announce our collaboration with Visa and Lunar to bring a new level of convenience and efficiency to the world of business lending for SMEs. Our goal was to create a new ecosystem within embedded lending that would offer entrepreneurs easy access to financing and instant payouts. With the support of Visa, we are able to offer this innovative solution to both neobanks and incumbent banks across multiple markets. We couldn’t be more excited about this partnership and look forward to seeing this new ecosystem grow, says Olle Lundin, CEO at Froda.

At a time when the economy is facing headwinds, access to financing becomes even more important for startups and small businesses looking to invest for the future. In order to support SMEs in the best possible way, it is crucial to find new ways to efficiently distribute SME financing. The solution aims to remove barriers by allowing loan repayments and payouts to be made directly through a payment card. Customers repay their loans through recurring card payments without having to track and manage monthly invoices.

– At Visa, we are constantly seeking new innovative ways to leverage the use of card infrastructure. The solution Froda has developed offers something new to the embedded lending ecosystem. We are very excited to be a part of this and can't wait to see the impact it will have on small business lending, says Philip Konopik, Regional Managing Director Nordics & Baltics at Visa.

By using Visa's infrastructure, the solution provides a consistent experience for customers regardless of market, without the need for adjustments to local invoicing and direct debit processes. Partnering up with card issuers will provide a source for transaction data to enhance credit scoring and ability to present accurate pre-scored available credit to customers.

– It’s a fantastic opportunity to be a part of this collaboration as it allows us to offer our customers a fully digital experience with card enrollment as part of the loan application process. This eliminates the need for a separate enrollment for direct debit solutions or collecting details for invoicing. Additionally, the ability to make instant loan payouts through push payments ensures that our customers can access the funding they need quickly and efficiently, says Mats Persson Bergius, General Manager, Sweden, at Lunar.

The embedded lending solution will be accessible to Lunar's customers in Q2 2023, with the possibility for more SME card issuers to join.

About the product
Froda will provide the product as an API-based white-label service in partnership with issuers of Visa business cards. SMEs will be able to apply for a business loan directly through their card provider (e.g. Neobank). The fully digital application process only takes a couple of minutes and will be embedded in the partner’s app or web app interface. As part of the application, customers will enroll their business card for loan payouts and recurring transactions for future amortization and interest payments. In the background, Froda makes an automated risk assessment of the SME and once the digital contract has been signed, Froda will immediately initiate a Visa Direct push payment for the loan amount, arriving in the customer’s bank account within seconds. Tokenization ensures that cardholder information is protected and kept up to date without the need for the customer to re-authenticate themselves when amortization and interest payments are made.

About Froda
Froda was founded in 2015 with a clear vision – to revolutionize the banking experience for entrepreneurs by making it easy and affordable to invest in their ideas.

Today, Froda is one of the fastest-growing fintechs in the Nordics with large international growth plans. So far, Froda has helped over 50 000 business owners to invest in their ideas. Froda is a regulated credit institution with government deposit guarantee and is under the supervision of the Swedish Financial Supervisory Authority.

About Lunar
Lunar is a Nordic digital challenger bank founded in 2015 in Denmark with operations in Denmark, Sweden and Norway, serving more than 325,000 users on its platform. In total, Lunar has raised more than EUR 300 million in equity funding and received a European banking license in 2019.

About Visa
Visa (NYSE: V) is a world leader in digital payments, facilitating transactions between consumers, merchants, financial institutions and government entities across more than 200 countries and territories. Our mission is to connect the world through the most innovative, convenient, reliable and secure payments network, enabling individuals, businesses and economies to thrive. We believe that economies that include everyone everywhere, uplift everyone everywhere and see access as foundational to the future of money movement. Learn more at Visa.se.