Froda Raises $22 Million to Expand Embedded Financing for European SMBs

It’s a rough time for FinTech startups to be asking investors nervous about tariffs for new equity funding.

In a press release Wednesday (April 23) Swedish startup Froda announced it has raised 20 million euros (about $22 million) in a Series B funding round to support its expansion across Europe and increase access to financing for small- to medium-sized businesses (SMB). The company has already established a presence in the Nordic nations, the U.K., Ireland and Germany, the release said.

The funding round was led by Stockholm-based investment firm Incore Invest, with continued participation from Froda’s existing investors, according to the release.

Embedded finance means financial services are directly available from the software solution. In the case of Froda’s platform, it connects SMBs with banks, neobanks and payment providers — leveraging data-driven processes to potentially reduce the time required for loan approval from months to minutes.

In a PYMNTS TV Washington Weekly chat, QED Investor Amias Gerety told PYMNTS CEO Karen Webster that early-stage companies need to focus on customer acquisition and product development, and not the economic uncertainty.

Perhaps that’s why some of these startups — particularly in the embedded finance space — are finding ways to meet their goals.

According to the Froda press release, embedded finance is gaining traction in Europe, where the SMB funding gap is estimated at 400 billion euros (about $453 billion).

In addition to expanding into new European markets and scaling the business, the release said that Froda plans to use the new capital to onboard additional embedded finance partners. Current partners include Mimo in the U.K., Lunar in the Nordic nations and Kontist in Germany, according to the press release.

According to Froda, the company achieved 30% year-over-year customer growth in 2024 and is adding approximately one new embedded partner each month.

The release also mentioned the company’s recent expansion of its partnership with the European Investment Fund to launch a “pan-European microfinancing guarantee.”

The company claims that SMBs using its platform grow up to 12 times faster than the national average.

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