Finfra, an Indonesian startup that provides the tech infrastructure for online businesses to offer embedded finance products, has secured $1 million in new funding. The round included participation from prominent venture capital firms and investors.
Funding Breakdown
The $1 million funding round was led by DSX Ventures, Seedstars International Ventures, Cento Ventures, Fintech Nation, FirstPick, BADideas Fund, and Hustle Fund. This significant investment will be utilized for product development and expanding Finfra’s engineering, data, and finance teams.
Company Overview
Finfra originated from Danabijak, a profitable consumer financial services provider that will continue operating as a subsidiary of the startup. The company is industry-agnostic but focuses on digital supply chain platforms, agtech companies, and merchant e-commerce platforms. Finfra’s primary offering is a loan management system, enabling businesses to provide credit to clients through their platforms.
Key Product Features
The most popular use case for Finfra is businesses seeking to incorporate invoice financing or purchase financing solutions into their offerings. The startup primarily serves B2B clients but can also be used for B2C applications. Finfra’s co-founder and CEO, Markus Prommik, describes the company as a "one-stop shop to launch and scale white-labelled credit services."
Without Finfra, its clients would need to invest millions of dollars in developing the necessary tech infrastructure and acquiring lending licenses, which can take up to five years. By utilizing Finfra’s APIs, businesses can start offering embedded finance within weeks.
Control Over Customer Experience
Finfra’s key value proposition is control over the customer experience. The startup integrates risk controls and data from clients’ platforms, enabling them to extend affordable credit without taking on excessive risk. Additionally, Finfra provides portfolio analytics to help customers monitor performance and key lending KPIs.
Differentiation in Embedded Finance
Prommik emphasizes that Finfra’s differentiation lies in not offering credit itself, despite it being the most in-demand financial service. Instead of viewing other embedded finance platforms as competitors, Finfra sees them as potential allies.
Growth Prospects
One factor contributing to Finfra’s growth prospects is the Indonesian Financial Services Authority (OJK) aiming to reach 90% financial inclusion by 2024, up from 75% in 2019. Despite the rise of online platforms in Indonesia, many people and small businesses still lack access to credit through traditional means, such as banks and other financial institutions.
Market Potential
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."
Paid Acquisition
Finfra’s growth strategy involves paid acquisition, which has proven effective for startups seeking to find product-market fit.
Indonesian fintech startup Finfra has secured $1 million in funding from prominent venture capital firms and investors. The company provides the tech infrastructure for online businesses to offer embedded finance products and is poised for growth with its unique value proposition and focus on control over customer experience.
