Startup FaaS Finfra Raises Initial Funding of 15 Billion Rupiah

Startups fintech-as-a-service (FaaS) Finfra has closed an initial $1 million (over 14,8 billion Rupiah) seed funding. This round came from the participation of various investors, including DS/X Ventures, Seedstars International Ventures, Cento Ventures, Fintech Nation, FirstPick, BADideas Fund, and Hustle Fund.

The fresh funds will be used by the company for product development and doubling the team engineers, data, and finance. Finfra which grew from a provider of consumer financial service solutions Danabijak, will continue to operate as a subsidiary of Finfra.

Quote from TechCrunch, Finfra Co-Founder and CEO Markus Prommik said that Finfra is industry agnostic, but focuses on digital supply chain platforms, agritech, and merchant e-commerce platforms. Finfra provides a loan management system so that businesses can offer credit to clients through their platform.

The most popular way Finfra is used is by businesses looking to add invoice financing or financing solutions purchasing. Its target audience is B2B, but it can also be used for B2C applications.

Prommik describes Finfra as "a one-stop shop for launching and scaling no-label lending services". That means clients don't have to spend millions of dollars developing technology and infrastructure and it can take up to five years to acquire licenses and build a team. By using the Finfra API, they can deliver embedded finance in a few weeks.

"Finfra's main value proposition is control over the customer experience, by integrating risk control and data from client platforms so they can provide affordable credit without taking too much risk. Finfra also has portfolio analytics to help clients monitor the performance and KPIs of their loan products," he explained. .

According to him, Finfra is different from the platform embedded finance Another thing in payments, data, and infrastructure is that they don't offer credit even though these are the most in-demand financial services. Instead of seeing them as competitors, Finfra views the platform as a potential ally.

One thing that Finfra is sure of is participating in driving the growth of financial inclusion proclaimed by the OJK by 90% in 2024, up from 75% in 2019. Even though online platforms in Indonesia are growing, many people and small businesses do not have access to credit from traditional financial institutions, such as banks and other financial institutions, and instead rely on alternative financing, incl embedded finance.

General Partner Seedstars International Ventures Patricia Sosrodjojo stated, "We have seen similar initiatives succeed in emerging markets where MSMEs face significant barriers to accessing capital. Finfra's approach is not only in line with national economic development objectives, but is also well positioned to to face the challenges of this rapidly growing market."

Prospect embedded finance

In previous interview, Prommik explained from Research and Markets in Asia Pacific, market share embedded finance estimated to reach $358 billion in 2029, with a projected CAGR of 24,4% in 2022-2029. "Embedded lending is expected to be one of the fastest growing sectors, and we plan to be at the forefront."

Even though Finfra was only released in May 2022, Prommik reveals its business contribution to the whole (combined with Danabijak) has leveled the position, aka 50:50 in the first quarter of 2023. The bright prospects for this FaaS solution make him believe that his contribution can even rival Danabijak, with predictions of 70%-80% of the total business volume by the end of this year.

Until now, Finfra has been used by various companies across industries, mostly engaged in the logistics industry, MSME support, and platforms E-commerce for merchants. One of its clients is CareNow, a startup that develops business solutions technology platforms for medical services.

CareNow utilizes this FaaS solution to provide an alternative for paying health bills using the installment method. This solution helps both sides, both from the patient and the hospital. For hospitals, they can provide access to finance to buy equipment, supplies, and help with cash flow. Of course, from patients, they can lighten their burden when they are treated by paying bills in installments.

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Disclosure: DS/X Ventures is part of the DailySocial.id group