• Swedish bank Froda gets EIF guarantee enabling SEK 560 million in new lending to micro-entrepreneurs in Sweden, Denmark and Finland.
• Transaction backed by the European Union’s InvestEU programme.
• Froda to support around 3,500 small businesses with advantageous micro-loans.

Froda received European Investment Fund (EIF) backing to expand lending to micro companies in the Nordics by SEK 560 million. A guarantee from the EIF, supported in turn by the InvestEU Microfinance and Social Entrepreneurship Guarantee, enables the Swedish micro-lender to offer the new loans on favourable terms to businesses in Sweden, Denmark and Finland that have no more than nine employees.

“Access to finance is still an issue around the EU, especially when it comes to the smallest segment of businesses,” said EIF Chief Executive Officer Marjut Falkstedt. “Through special initiatives such as this InvestEU guarantee, Froda can improve its lending terms and conditions to reach out to a riskier segment of micro-entrepreneurs because we are guaranteeing part of the risk. This is a clear way in which EU finance can help the most vulnerable entrepreneurs, and we are glad to partner with Froda to make it happen.”

Apart from lowering interest rates and collateral requirements on lending by Froda, the EIF guarantee allows the Stockholm-based financial intermediary to reach new market segments. The European backing will specifically benefit micro-lending in the risky start-up field, where loan requirements were previously too high, improving access to finance across the Nordics.

“This collaboration aligns with our vision to assist as many small business owners as possible with financing on favourable terms, as the guarantees allow us to enhance access to financing at improved terms for these entrepreneurs,” said Froda CEO and co-founder Olle Lundin. “Our shared agenda with the EIF is to serve the hard-to-serve micro-enterprise segment. In the first few weeks, we have seen that over 50% of our clients are already supported by the programme.”

With an average transaction size of around SEK 160,000 (€13,838), Froda expects to serve around 3,500 micro businesses around the three Nordic countries where this guarantee will be deployed.Europe has 25 million small and medium-sized enterprises (SMEs) and one of their primary growth obstacles is a lack of available financing. Europe’s InvestEU programme, in which the EIF is a main implementing partner, aims to help micro-enterprises in the EU access the financing they need through partnerships with companies specialising in loans for micro businesses.

Background information
The European Investment Fund (EIF): The EIF is part of the EIB Group. It supports Europe’s SMEs by improving their access to finance through a wide range of selected financial intermediaries. The EIF designs, promotes and implements equity and debt financing instruments targeting SMEs. In this role, EIF fosters EU objectives in support of entrepreneurship, growth, innovation, research and development, the green and digital transitions and employment.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for EU policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub, and the InvestEU Portal. The InvestEU Fund is implemented through financial partners who will invest in projects using the EU budget guarantee of €26.2 billion. With the InvestEU mandate, European institutions – led by European Commission and EIB Group – aim to mobilise more than EUR 372 billion of public and private investments to finance sustainable investment, innovation and job creation throughout Europe over the period 2021-2027.

Froda was founded in 2015 with a clear mission – to democratise the access to financing and provide small and medium-sized businesses with the same opportunities for growth as large ones. Through digital processes and technological innovation, Froda has shortened the loan process from months to minutes, making it easy for entrepreneurs to invest in their ideas. Today, Froda is one of Sweden's fastest-growing tech companies with a SEK 1.7 billion valuation and well known investors such as Karl-Johan Persson, Nicklas Storåkers and Victor Jacobsson among the owners.

In 2021, Froda launched a strategic initiative in embedded financing. Through this, Froda are now present in seven markets and have established partnerships with Visa, Lunar, and Checkout.com, among others. Froda is a credit market company regulated by the Swedish Financial Supervisory Authority.

In recent years, Froda has experienced strong growth and increased its focus on embedded finance. Now, Visma Finance joins as a new partner to Froda Embedded. The collaboration involves the companies jointly launching the new product invoice loans.

Froda's technology platform, Froda Embedded, enables partners to offer business loans and new types of financing solutions to their customers. The partnership with Visma Finance means that small business owners gain more flexibility through a new type of loan product. Unlike a regular business loan, the loan is not paid out to the customer, but instead to automatically pay the invoice.

"With Froda Embedded, we can give more companies the opportunity to offer financing to their customers based on their needs. This contributes to our vision of helping as many entrepreneurs as possible to access financing," says Olle Lundin, CEO and co-founder of Froda.

Visma Finance is one of Sweden's leading actors within invoice financing for small and medium-sized companies. With the partnership, business owners who have received an invoice from a supplier using Visma Finance can split the payment of the invoice through an invoice loan, while the invoicing company does not have to wait for payment.

"We are very pleased with the collaboration with Froda and the opportunities it provides us and our customers. We aim to be a comprehensive solution for small business owners, and Froda has a market-leading product for lending to small businesses that we look forward to offering," says Martin Källum, Chief Product Officer at Visma.

About Froda

Froda was founded in 2015 with a clear mission – to democratize the access to financing and provide small and medium-sized businesses with the same opportunities to grow as large ones.

Through digital processes and technological innovation, Froda has shortened the loan process from months to minutes, making it easy for entrepreneurs to invest in their ideas. Today, Froda is one of Sweden's fastest-growing tech companies with a 1.7 billion SEK valuation and well known investors such as Karl-Johan Persson, Nicklas Storåkers and Victor Jacobsson among the owners.

In 2021, Froda launched a strategic initiative on embedded financing, and through it, the company has expanded to the Nordics, the United Kingdom, Germany, and Ireland, and entered into partnerships with, among others, Visa, Lunar, and Checkout.com. Froda is a credit market company under the supervision of the Financial Supervisory Authority. Read more: https://froda.se/en

About Visma Finance

Visma Finance AB, as part of the Visma group, leads in solutions for embedded corporate financing in business and financial systems in Sweden. Read more: vismafinance.se

Visma is a leading provider of business-critical software in the cloud, with a turnover of 2.06 billion euros in 2022, 15,000 employees, and 1.7 million customers in Europe and Latin America. By simplifying and automating the work for businesses and organizations of all sizes, we enable a more efficient and prosperous society. Visit us at visma.se.

The Swedish fintech company Froda has demonstrated strong growth in recent years. Last fall, the company reached a valuation of SEK 1.7 billion, and since its inception, Froda has provided businesses with over SEK 10,5 billion in financing. Now, the company is announcing the next step in its growth journey by entering its seventh market – Ireland. The expansion is facilitated through a partnership with Treyd.

– Our mission has always been to develop a universally applicable financing solution for small businesses. The expansion over the past year is clear evidence that we have made significant progress on this journey. Last year, we assisted entrepreneurs in five different markets in accessing financing. Our ambition for 2024 is to double that impact, says Olle Lundin, CEO and co-founder of Froda.

Over the past years, Froda has focused internationally through Froda Embedded. In 2023, the company entered two new markets and increased its international portfolio by over 800 percent. Froda Embedded serves as a dynamic tech platform, allowing fintech companies and banks to seamlessly integrate and provide growth financing or business loans to their customers.

– With our Embedded financing product, we can help growth companies offer their customers flexible financing solutions through a simple API integration. The partnership with Treyd means that we can help each other scale up and make our financing solution available to many more merchants, says Stella Snickare, VP Froda Embedded.

One of Froda´s partners is fintech company Treyd, which through its “Sell first, pay suppliers later” solution offers a new and simplified take on inventory financing for growing SMEs. With the help of Froda Embedded’s API integration, Treyd can now provide even more flexible financing options to merchants, also in Ireland.

– The partnership with Froda has enabled faster expansion, both geographically and operationally. It has helped even more merchants finance inventory, enabling them to sell first and pay suppliers later, says Peter Beckman, CEO and co-founder of Treyd.

Entering the Irish market means that Froda is now present in seven markets: Sweden, United Kingdom, Germany, Denmark, Norway, Finland and Ireland.