finmid raises 17 million euros

The Berlin-based fintech company finmid has raised an additional 17 million euros from investors. The funding round was led by Big Pi Ventures, Main Set, and Earlybird VC. This brings the total capital raised by the company to date to 52 million euros. finmid plans to use the funding to further expand its embedded lending business and increasingly offer larger and longer-term business loans via digital platforms.

The business model operates right where companies already conduct their business. Instead of having to go to a bank separately to secure financing, commercial users can apply for loans or financing directly through connected platforms.

According to finmid, since its market launch, financing offers totaling more than four billion euros have been made available in 30 European markets. Approximately 85 percent of borrowers would subsequently use the service again.

Loans Become Part of Digital Platforms

finmid provides the technical and financial infrastructure behind such offerings. This enables platform operators to offer financing options to their business customers without having to build their own lending infrastructure.

According to the company, the range of available financing options is expanding. Embedded lending was initially often limited to relatively short-term working capital financing for small businesses and retailers. finmid now also uses the infrastructure for longer-term financing products.

One example of this is the partnership with the mobility platform Bolt. Together, the companies have established the Bolt Vehicle Solutions offering in Germany.

Through this service, fleet operators can select vehicles and then apply for financing through finmid. Repayment is made in fixed monthly installments. Upon the final payment, ownership of the vehicle transfers to the fleet operator.

More than 40 million euros in financing offers for Bolt fleets

According to finmid, financing offers totaling more than 40 million euros have been provided through Bolt Vehicle Solutions to over 400 fleets in Germany to date.

This use case thus differs significantly from traditional short-term working capital loans. Instead of, for example, providing a dealer with liquidity for a few months, finmid finances vehicles over a longer period of time.

Data from the platforms can play an important role in the credit decision-making process. Traditional credit checks are sometimes only partially effective, particularly for smaller companies or specialized business models.

finmid therefore intends to place greater emphasis on the operational data generated on the respective platforms. With the Bolt offering, for example, information about a fleet operator’s business can be factored into the assessment.

Skroutz as Another Partner

In addition to Bolt, finmid cites the Greek online marketplace Skroutz as another example of the expansion of its platform business. There, merchants are to gain access to financing offers.

In doing so, finmid is pursuing a B2B2B approach: The company does not primarily act as an independent lending brand toward small and medium-sized enterprises, but rather integrates its financing offerings into platforms that already have a business relationship with these companies.

For platform operators, this creates the opportunity to incorporate additional financial services into their existing offerings. finmid, in turn, gains access through the partnership to a larger number of potential borrowers and to data that can assist in assessing the companies.

More Than Four Billion Euros in Financing Offers

According to its own figures, finmid has now facilitated financing offers totaling more than four billion euros through its infrastructure. The company is active in 30 European markets.

As another key metric, finmid cites a repeat rate of around 85 percent among borrowers. The company does not provide details in its announcement regarding the time period over which the rate was calculated or which financing products were included in the calculation.

Nor can the actual volume of financing disbursed be deduced from the information provided. The four billion euros mentioned explicitly refers to financing offers and should therefore not be equated with the loan volume ultimately drawn down by companies.

A total of 52 million euros raised

With the additional 17 million euros, finmid’s total funding rises to 52 million euros. The new funding is intended, in particular, to support the platform’s next stage of development.

In this context, the scope of embedded lending is increasingly shifting beyond short-term liquidity solutions. Multi-year vehicle financing, such as that offered by Bolt, demonstrates that the underlying infrastructure can also be applied to larger financing decisions.

For finmid, this opens up a correspondingly larger market. A key factor will be whether the lending models can be adapted to different platforms, industries, and European markets, and how the quality of the loans develops over longer terms. With 4 billion euros in financing offers to date, finmid says it has already reached a significant scale.