Finfra, an innovative Indonesian startup that provides cutting-edge technology infrastructure for online businesses seeking to offer embedded finance products, has secured a significant $1 million in new funding. This notable investment comes from a group of esteemed venture capital firms and investors, including DSX Ventures, Seedstars International Ventures, Cento Ventures, Fintech Nation, FirstPick, BADideas Fund, and Hustle Fund.
Growing Demand for Embedded Finance
The startup’s latest funding will be utilized to enhance product development and bolster Finfra’s engineering, data, and finance teams. Finfra has its roots in Danabijak, a consumer financial services provider that is profitable and will continue operating as a subsidiary of Finfra. This strategic move enables Finfra to leverage its expertise and resources to drive growth.
Focus on Digital Supply Chain Platforms
Finfra’s industry-agnostic approach focuses primarily on digital supply chain platforms, agritech companies, and merchant e-commerce platforms. According to co-founder and CEO Markus Prommik, the startup provides a loan management system that enables businesses to offer credit to clients through their platforms. The most popular application of Finfra is in providing invoice financing or purchase financing solutions.
Key Value Proposition: Control Over Customer Experience
Prommik emphasizes that Finfra’s primary value proposition lies in its control over the customer experience. By integrating risk controls and data from clients’ platforms, Finfra enables businesses to extend affordable credit without assuming excessive risk. Additionally, Finfra offers portfolio analytics to help customers monitor performance and key lending KPIs.
Differentiator: Embedded Finance Platforms
Finfra’s differentiator from other embedded finance platforms in payments, data, and infrastructure is its unique approach. Unlike these platforms that offer credit services, Finfra does not provide credit itself, despite it being the most sought-after financial service. Instead of viewing them as competitors, Finfra sees these platforms as potential allies.
Growth Prospects
Finfra believes that growth will be bolstered by the Indonesian Financial Services Authority’s (OJK) efforts to reach financial inclusion targets of 90% by 2024, up from 75% in 2019. Despite the proliferation of online platforms in Indonesia, many individuals and small businesses still lack access to credit through traditional means, such as banks and other financial institutions. As a result, they rely on alternative methods, including embedded finance.
Quote from Seedstars International Ventures
In a statement, Patricia Sosrodjojo, general partner at Seedstars International Ventures, noted: "We’ve seen similar initiatives succeed in emerging markets where MSMEs face significant hurdles to accessing capital. Finfra’s approach not only aligns with national economic development goals but is well-positioned to take on the challenges of this rapidly growing market."
Finfra: A One-Stop Shop for White-Labeled Credit Services
Prommik describes Finfra as a ‘one-stop shop to launch and scale white-labelled credit services.’ According to him, without Finfra’s technology and infrastructure, businesses would need to spend millions of dollars on development and up to five years acquiring lending licenses and building a team. By using Finfra’s APIs, clients can start offering embedded finance within weeks.
Concluding Thoughts
Finfra is revolutionizing the embedded finance space with its innovative approach and cutting-edge technology infrastructure. As it continues to grow and expand its reach, Finfra is poised to play a significant role in driving financial inclusion in Indonesia and beyond. With its focus on control over customer experience and collaboration with other embedded finance platforms, Finfra is well-positioned for success in this rapidly growing market.
