Froda is a Sweden tech company that helps business owners reach their full potential by making financing easily accessible, on the best possible terms. Oliver Mohseni, its Co-Founder, tells Qorus’ Boris Plantier more about it.
What led to the creation of Froda?
It all started at the SSE Business Lab at the Stockholm School of Economics back in 2015. My co-founders and I realized that difficulty in accessing financing was one of the main concerns for us and other students. We started looking into it and realized that accessing financing was one of the biggest problems for SMEs.
The traditional B2B lending process is slow, manual and takes a lot of soft information in consideration. In order to reach profitability and make the assessment worth the effort, the loan amount has to be quite large. SMEs usually need quite small amounts, which makes them far from the ideal customer for the traditional lender. This has created a €400bn SME financing gap in Europe.
We believed that there had to be a better and more efficient way of doing things. So that’s kind of where it started. We wanted to revolutionize the lending process and we wanted to help as many SMEs as possible get access to financing, and to do so at the best possible terms.
Could you present Froda’s offer?
Our offering has developed since the early days, but SME financing is still at the core of everything we do. We currently have two business units, our traditional lending operation and our embedded financing platform.
With our traditional offering, we offer financing direct-to-businesses under our own Froda brand. But in contrast to the traditional lending process, ours is fully digital and developed to cater to the needs of SMEs.
We use a combination of data scraping and artificial intelligence to remove all the manual elements of the process and automate the credit process. This allows us to cut the application-to-payout time from months to minutes, and to offer loans with great terms, from €150,000 all the way down to €1,000 – and to be profitable while doing so.
With Froda Embedded, we are instead offering access to our platform to banks, neobanks, fintechs and other business service providers. It’s essentially a white-label product that allows them to integrate our SME financing offering under their brand, instead of them having to build their own lending infrastructure.
By doing so, the partner can solve a major need for their customers, while adding an additional income stream for themselves. And we are able to grow on several fronts simultaneously, which allows us to fulfill our purpose of helping as many SMEs as possible faster.
What’s coming next for Froda?
We have experienced over 100% year-over-year growth since 2015. The plan moving forward is to continue to do so. Our primary focus in the coming years will be to continue to establish Froda Embedded as the leading embedded financing provider, to continue to expand the offering to new markets in Europe and to strengthen our partnership with Visa.
I can confirm that there are ongoing talks about launching in additional markets with more than one current and potential partners, and our goal is to enter three or four new markets within a 12 month period.
