Finfra, an Indonesian startup that provides the tech infrastructure for online businesses that want to offer embedded finance products, has raised $1 million in new funding. The round included participation from DSX Ventures, Seedstars International Ventures, Cento Ventures, Fintech Nation, FirstPick, BADideas Fund and Hustle Fund.
The startup’s new funding will be used on product development and to grow Finfra’s engineering, data and finance teams. Finfra grew out of consumer financial services provider Danabijak, which is profitable and will continue operating as a subsidiary of Finfra.
Finfra is industry-agnostic, but it focuses on digital supply chain platforms, agritech companies and merchant e-commerce platforms, said co-founder and CEO Markus Prommik. It provides a loan management system so businesses can offer credit to clients through their platforms. The most popular way Finfra is used is by businesses who want to add invoice financing or purchase financing solutions. Finfra primarily serves B2B, but can also be used for B2C applications.
Prommik describes Finfra as a “one-stop shop to launch and scale white-labelled credit services,” explaining that without the startup, its clients would need to spend millions of dollars to develop the necessary tech and infrastructure, spend up to five years acquiring lending licenses and building a team. Instead, by using Finfra’s APIs, they can start offering embedded finance within weeks.
Finfra’s key value proposition is control over the customer experience. It integrates risk controls and data from clients’ platforms so they can extend affordable credit without taking on too much risk. Finfra also has portfolio analytics to help customers monitor performance and key lending KPIs.
Prommik said that Finfra’s differentiator from other embedded finance platforms in payments, data and infrastructure is that they do not offer credit, even though it is the most in-demand financial service. Instead of seeing them as competitors, Finfra views those platforms as potential allies.
One thing that Finfra believes will bolster its growth is the Indonesian Financial Services Authority (OJK) to reach financial inclusion targets of 90% by 2024, up from 75% in 2019. Despite growth in online platforms in Indonesia, many people and small businesses still lack access to credit through traditional means, like banks and other financial institutions, and instead rely on alternatives, including embedded finance.
In a statement, Patricia Sosrodjojo, general partner at Seedstars International Ventures, said, “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.”