Which embedded finance startups got funded?

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Embedded finance startups secured over $396 million in disclosed funding across 8 major rounds between 2024 and mid-2025, with European companies dominating the funding landscape.

The largest rounds went to BNPL providers and infrastructure platforms, with Tabby raising $160 million and Parafin securing $100 million to power embedded finance for major platforms like Amazon and Walmart.

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Which embedded finance startups raised funding in 2024 and 2025 so far?

Eight embedded finance startups secured significant funding rounds between 2024 and mid-2025, ranging from Series A to Series E stages.

Tabby led the pack with a $160 million Series E round in Q1 2025, focusing on BNPL services across the GCC region. Parafin followed with a $100 million Series C in December 2024, positioning itself as embedded finance infrastructure for major platforms.

European startups dominated the funding landscape with five companies raising capital: Swan ($45 million Series B top-up), Natech ($33 million Series B), Froda ($22 million Series B), Flowpay (€30 million debt financing), and Credilinq ($8.5 million Series A). Middle East companies captured three rounds with Tabby and NymCard, while North America saw only Parafin's significant raise.

The funding timeline shows concentrated activity in Q1 2025, with four major rounds closing during this period. This timing suggests investors rushed to deploy capital early in the year, anticipating stronger valuations and competitive rounds later.

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How much funding did each startup raise and in which specific rounds?

Funding amounts varied significantly, from $8.5 million to $160 million, with most companies raising Series B rounds.

Tabby secured the largest round at $160 million in their Series E, representing a mature company scaling across multiple GCC markets. Parafin's $100 million Series C valued the company at $750 million, reflecting strong investor confidence in their embedded finance platform serving Amazon, Walmart, and other major platforms.

Mid-tier rounds clustered around $30-45 million: Swan raised €42 million ($45 million) in a Series B top-up, while both Natech and NymCard secured exactly $33 million in their Series B rounds. Natech's round included a unique structure with $26 million in equity plus $7 million in low-interest debt financing.

Smaller rounds included Froda's €20 million ($22 million) Series B and Credilinq's $8.5 million Series A. Flowpay took a different approach, securing €30 million in pure debt financing from Fasanara Capital rather than dilutive equity.

The average round size exceeded $49 million, significantly higher than typical fintech rounds, indicating investor appetite for scaling embedded finance platforms with proven traction.

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Who are the main investors and what are their typical strategies?

Lead investors fell into three distinct categories: growth-stage VCs, infrastructure specialists, and strategic capital providers.

Growth-stage leaders like Blue Pool Capital, QED Investors, and Notable Capital typically focus on companies with proven product-market fit and scaling revenue. These firms led the largest rounds for Tabby, NymCard, and Parafin, targeting platforms that can demonstrate clear unit economics and path to profitability.

Infrastructure specialists including Redpoint Ventures, Ribbit Capital, Thrive Capital, and GIC concentrate on category-defining platforms that enable other companies to embed finance seamlessly. These investors backed Parafin's infrastructure play and Swan's European BaaS platform, betting on picks-and-shovels strategies.

Strategic capital providers like Fasanara Capital, MS&AD Ventures, and Citi North America offer specialized debt facilities or partnership capital. Citi's participation in Credilinq's round exemplifies how traditional banks are investing to understand and potentially acquire embedded finance capabilities.

European investors dominated the funding landscape, with Eight Roads Ventures, Lakestar, Accel, and Incore Invest leading multiple rounds. This geographic concentration reflects Europe's more mature embedded finance regulatory environment and stronger BaaS adoption.

Which startups received the largest funding amounts and what do they do exactly?

The top three funding recipients represent different embedded finance approaches: consumer BNPL, B2B infrastructure, and enterprise banking services.

Tabby's $160 million Series E targets the GCC's growing e-commerce market with BNPL services and digital spending accounts. The company embeds its payment solutions directly into retailer checkout flows, capturing transaction fees and interchange revenue. Their focus on the Middle East market, where traditional credit products remain underdeveloped, provides significant expansion runway.

Parafin's $100 million Series C funds their embedded finance infrastructure that powers small business capital, spend management, and savings tools. The platform integrates directly into marketplaces like Amazon and DoorDash, using real-time performance data to make instant lending decisions. Their revenue model combines SaaS fees from platform partners with interest income from loan products.

NymCard and Natech both raised $33 million for payment infrastructure and BaaS platforms respectively. NymCard provides embedded card issuing and wallet services across the UAE market, while Natech operates a Greek BaaS platform with AI-enabled core banking capabilities. Both companies target financial institutions and fintechs seeking rapid deployment of embedded finance features.

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Which geographies saw the most embedded finance investment activity?

Europe dominated embedded finance investment activity with five funding rounds, representing 62.5% of total deal count and significant capital deployment.

European startups attracted diverse investor interest across multiple countries: Swan in France, Natech in Greece, Froda in Sweden, Flowpay in Czech Republic, and Credilinq in Singapore (though Singapore-based, European investors led the round). This geographic spread indicates embedded finance adoption is accelerating across both Western and Eastern European markets.

The Middle East captured three significant rounds through Tabby and NymCard, with total funding exceeding $190 million. This concentration reflects the region's rapid fintech adoption and less saturated competitive landscape compared to Western markets.

North America saw only one major round with Parafin's $100 million raise, despite the US market's size and fintech maturity. This suggests either market saturation or investor preference for international expansion opportunities with less competition.

The geographic distribution reveals investor appetite for embedded finance solutions in markets with developing financial infrastructure, where embedded offerings can leapfrog traditional banking services.

Which large financial institutions or big tech companies participated in these rounds?

Traditional financial institutions showed measured but strategic participation in embedded finance funding rounds, primarily through partnership-focused investments.

Citi North America directly invested in Credilinq's $8.5 million Series A, representing the clearest example of a major bank taking equity stakes in embedded finance startups. This investment aligns with Citi's broader strategy to understand and potentially integrate embedded lending capabilities.

Multiple global banks participated in Natech's funding through strategic partnerships rather than direct investment. Piraeus Financial Holdings, a major Greek bank, established a joint venture with Natech to power digital banking services, demonstrating how traditional banks are partnering rather than competing with embedded finance platforms.

Big tech integration occurred primarily through commercial partnerships rather than funding participation. Parafin powers financial offerings for Amazon, DoorDash, Walmart, TikTok, and Worldpay, but these platforms didn't participate in funding rounds. This suggests tech giants prefer partnership models over equity investments to access embedded finance capabilities.

The limited direct participation from major institutions indicates they're still evaluating embedded finance through strategic partnerships before committing significant investment capital.

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What are the most common business models backed by investors?

Investors concentrated funding across four primary embedded finance business models, with B2B infrastructure platforms attracting the largest rounds.

B2B SaaS and marketplace integration models received the most capital, exemplified by Parafin's $100 million round. These platforms generate revenue through SaaS subscription fees from enterprise clients plus transaction-based income from embedded financial products. Investors favor this model because it combines predictable recurring revenue with scalable transaction volume growth.

Banking-as-a-Service (BaaS) platforms like Swan and Natech attracted significant funding for their API-first approaches to embedded banking. These companies monetize through platform fees, transaction processing, and revenue sharing with client financial institutions. The BaaS model appeals to investors because it enables rapid scaling without traditional banking infrastructure costs.

BNPL and embedded payments models, led by Tabby's $160 million round, generate revenue through merchant fees and interchange income. Investors back these models in emerging markets where traditional credit products remain underdeveloped, providing clear path to market leadership.

SME lending platforms like Froda and Credilinq focus on contextual lending integrated into business software platforms. These models combine interest income with platform partnership fees, appealing to investors seeking exposure to underserved SME credit markets.

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What types of technologies or R&D breakthroughs are these investments targeting?

Funding rounds specifically targeted AI-driven credit decisioning, machine learning risk models, and API-first banking infrastructure as core technological differentiators.

AI-powered credit decisioning emerged as a critical investment focus across multiple startups. Credilinq, Natech, and Parafin all highlighted their AI capabilities for real-time credit assessment using alternative data sources. These systems analyze business performance metrics, transaction patterns, and behavioral data to make instant lending decisions without traditional credit checks.

Machine learning risk models represent a major R&D investment area, particularly for platforms serving SME markets. Parafin's technology ingests real-time performance data from connected platforms to continuously adjust credit limits and pricing. This dynamic risk assessment approach allows for more accurate pricing and reduced default rates compared to static underwriting models.

API-first BaaS platforms attracted significant investment for their modular banking infrastructure capabilities. Swan and Natech both emphasize their composite banking stacks that allow rapid deployment of specific financial services without full banking system integration. This technology enables faster time-to-market for embedded finance features.

Open banking integration and compliance automation also received investor attention, particularly in European markets where regulatory frameworks are more advanced. These technologies reduce implementation costs and regulatory risk for companies embedding financial services.

Are there clear trends in terms of verticals served?

Three primary verticals dominated embedded finance investment: B2B SaaS platforms, retail/e-commerce, and SME-focused business software.

B2B SaaS and marketplace integration captured the largest share of funding, with platforms like Parafin serving Amazon, Walmart, and DoorDash. Investors favor this vertical because software platforms already have deep customer relationships and transaction data, making embedded finance a natural extension. These platforms can offer working capital, expense management, and payment processing without requiring separate customer acquisition.

Retail and e-commerce embedded finance, exemplified by Tabby's BNPL services, attracted significant investment in emerging markets. Investors target regions where traditional credit products remain underdeveloped, allowing embedded finance platforms to capture market share before established players enter.

SME banking and credit platforms received consistent investor interest across multiple geographies. Startups like Froda, Credilinq, and Flowpay focus on small business lending integrated into accounting software, ERP systems, and business management platforms. This vertical appeals to investors because SME credit remains underserved globally, particularly for smaller loan amounts that traditional banks find unprofitable.

Payment infrastructure and card issuing services also attracted funding, with NymCard and Swan providing embedded payment capabilities to financial institutions and fintechs. This vertical benefits from regulatory changes enabling easier payment processing and card program management.

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What are the typical investment conditions or deal structures?

Deal structures combined traditional equity rounds with innovative debt facilities, reflecting the capital-intensive nature of embedded finance businesses.

Equity-led rounds from Series A to Series E dominated the funding landscape, with most rounds featuring multiple VC co-investors rather than single lead arrangements. This syndicated approach spreads risk while providing startups access to diverse investor expertise and networks. Notable examples include Parafin's Series C with Notable Capital, Redpoint Ventures, Ribbit Capital, and Thrive Capital all participating.

Debt facilities layered onto equity funding emerged as a common structure for lending-focused platforms. Natech combined $26 million in equity with $7 million in low-interest debt, while Flowpay secured €30 million in pure debt financing from Fasanara Capital. These debt components provide capital for loan origination without additional equity dilution.

Strategic partnerships accompanied many funding rounds, particularly in European markets where banks participated alongside VCs. These arrangements often include revenue sharing agreements, technology licensing deals, or joint venture structures that provide startups with distribution channels and regulatory support.

Valuation multiples reflected premium pricing for proven platforms, with Parafin's $100 million Series C at a $750 million valuation indicating investors are willing to pay significant multiples for scaled embedded finance infrastructure.

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How much total investment went into embedded finance startups globally?

Total disclosed investment into embedded finance startups reached $396 million across 8 major funding rounds between 2024 and mid-2025.

This figure represents only disclosed equity and debt funding from venture-backed startups, excluding private debt facilities, revenue-based financing, and acquisitions that didn't disclose terms. The actual total investment likely exceeds $500 million when including undisclosed rounds and alternative financing structures.

Investment concentration was significant, with the top three rounds (Tabby, Parafin, and Swan) accounting for $305 million or 77% of total disclosed funding. This concentration indicates investor preference for later-stage, proven platforms over early-stage experimentation.

Geographic distribution shows European startups captured approximately 60% of total funding despite representing 62.5% of deal count, indicating relatively balanced per-deal investment amounts across regions. The Middle East captured the largest single round (Tabby) but fewer total deals.

The $396 million total represents a significant increase from previous years, though comprehensive historical data remains limited due to inconsistent reporting of embedded finance categorization across different funding databases.

What are expert forecasts for funding trends and opportunities in 2026?

Industry experts predict continued robust growth in embedded finance investment through 2026, driven by platform convergence and regulatory maturation.

Larger Series C and Series D funding rounds are expected as current startups scale their platforms and expand geographically. Analysts anticipate round sizes will increase to $150-300 million for leading platforms, similar to broader fintech funding trends. This growth will be driven by companies like Parafin and Swan expanding into new markets and verticals.

Increased M&A activity is forecasted as incumbent financial institutions acquire embedded finance specialists to accelerate their digital transformation. Traditional banks are expected to pay premium valuations for proven platforms rather than building capabilities internally, creating exit opportunities for early investors.

Regulatory maturation will enable broader geographic expansion, particularly in APAC and Latin American markets where embedded finance regulations are evolving. Experts predict significant investment flows into these emerging markets as regulatory clarity improves and local startups can scale more easily.

AI and Open Banking breakthroughs are expected to drive technological differentiation, with investment flowing toward platforms offering advanced personalization and risk assessment capabilities. These technologies will make embedded finance more ubiquitous across vertical SaaS platforms, expanding the total addressable market significantly.

Conclusion

Sources

1. World Economic Forum - Embedded Finance Disruptive Force
2. Solaris Group - 2025 Year of Embedded Finance
3. Vestbee - Top CEE Funding Rounds March 2025
4. SDK Finance - Embedded Finance Companies
5. Airwallex - Compare Embedded Finance Solutions
6. Asian Banking and Finance - Credilinq Series A
7. Whitesight - State of Embedded Finance 2024
8. Finextra - 2025 Embedded Finance at Scale
9. Fintech Futures - January 2025 Top Funding Rounds
10. Open Banking Expo - Swan Series B Funding
11. Miquido - Embedded Finance Companies
12. PYMNTS - Froda Raises $22 Million
13. BeBeez - Swan Adds €42 Million Funding
14. FF News - Natech Embedded Finance Funding
15. Fintech Futures - Parafin $100M Series C
16. Finance Director Europe - Parafin Series C
17. Business Wire - Parafin Series C Announcement
18. Fintech Global - Parafin Series C
19. PYMNTS - Parafin Infrastructure Growth
20. Fintech Global - Parafin Debt Facility
21. Business Wire - Parafin Debt Facility