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Hi embedded finance friend

It feels like winter has arrived in Berlin; temperatures have dropped, and I appreciate my home office more than ever.

There are quite a few updates on my end that I want to share with you.

Sponsorships → A few companies have reached out to me regarding sponsoring this newsletter and the podcast, and it seems like we will be starting soon with this. Maybe already next week, but definitely in November. Again, nothing will change for you as a reader except that the place below this welcome message will promote an embedded finance company.

Events in Germany → I have started thinking about events for 2025. Similar to the past two years, I am likely hosting one event in the first half and one in the second half of 2025. If you are interested in partnering, please reach out.

Events abroad → To be completely transparent, it was my plan to increase the number of events in 2024. I did not achieve that and realised it is probably very hard to achieve with my current setup of just one person. Therefore, I am currently exploring new event setups, especially for cities outside of Germany. If you want to host your own embedded finance-focused event and get my involvement plus the Embedded Finance Review brand, please reach out.

Podcasts → I am currently contemplating changing the podcast cadence from biweekly to weekly episodes after I realised that episodes are fixed for well into January. What do you think is the right cadence? But to be completely honest, I would not be able to switch to weekly podcast episodes before the sponsorship is up and running. I enjoy recording and publishing podcasts, but it’s a bit of work as well :-)

And if you are interested in hearing a bit more about my journey of building Embedded Finance Review alongside my freelance business, check out this short interview with me on Orama’s newsletter.

And now let’s dive in 👇

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New embedded lending provider bets on orchestration

What happened: British embedded lending provider Groov has announced a £1.5 million seed funding and shared more insights about their orchestration offering (Fintech Global). While integrating the Groov API, non-financial and financial brands can offer financing products from different lending providers and can also add their own lending partner into the solution. Groov’s focus is on vertical SaaS and marketplaces.

My comment: Groov’s founder and CEO talks in a separate blog post about the development from embedded lending 1.0 to 2.0 (Medium). It touches on many points, and I would assume that almost every embedded lending provider is deeply thinking about (most of) them. But Groov’s orchestration approach is not that common in embedded lending, while we have seen a few providers in the embedded banking and payment space with an orchestration approach. In theory, the orchestration model sounds perfect for an embedded lending offering. While integrating an orchestrator, the embedder can access different loan books, risk appetites, and financing products via one single integration. But the model has its challenges, as the orchestration provider has strong dependencies on their lending partners and the customer journey has likely more friction. I also wonder what kind of lending partners would want to be part of an orchestration layer. Currently, Groov partners with digital alternative lenders but mentions also traditional banks as potential lending partners.

Personally, I do see a future where, in about 5-10 years, orchestration is the new normal for embedded lending providers. But I do wonder what the path towards that future will look like.

Embedded finance enabler partners with Saudi Bank

What happened: Audax partners with Jeel, the digital innovation arm of Riyad Bank, to enable local banks to launch digital banks, BaaS, super apps, and open banking solutions (Finextra). Audax is headquartered in Singapore and is a subsidiary of Standard Chatered. Saudi Arabia’s financial service sector is going through a massive transformation as part of the Vision 2030 activities.

My comment: Audax’s journey started under the brand Standard Chartered Nexus where it enabled its owner, Standard Chartered, to become the first bank in Asia to offer banking-as-a-service products, including the partnership with Indonesian commerce platform Bukalapak (Bukalapak). After this success, Standard Chartered decided to rebrand the unit into Audax and offer the services to other banks. It seems logical for Riyad Bank to partner with a provider like Audax, as it enables them to gain massive insights and the necessary tech to offer such solutions.

Unlike half of my LinkedIn connections, I haven’t been to Saudi Arabia’s event “24 Fintech” this year and have only limited knowledge about the market. I would assume that banking-as-a-service, embedded finance, and perhaps also open banking have big potential in the market. However, I would also expect that use-cases could be quite different from Western markets, and especially wealth-related solutions might be much more relevant.

How should you price embedded payments?

Our favourite vertical SaaS and fintech-focused VC Matt Brown has shared insights about the secret of pricing embedded finance (Matt Brown’s Notes). His post is based on a longer deck from US embedded payments company Rainforest, in which Matt Brown invested (direct link to the Rainforest deck).

It’s a great deck for any company looking at embedded payments into their product. The information is US focused, but most of it is still applicable for non-US companies. My personal highlights:

• “Embedded payments are most successful when added to a robust product that merchants already rely on.”

• Outlining how the two options of interchange plus and blended differ and the implications for platforms

• The various mythes, especially the one that says you need to match pricing with the existing payment solution of your customers

And even if you know all these points already, I still recommend having a look at the deck, as it can serve as a handy source for upcoming internal discussions.

Insightful stories

• British challenger bank Monument hires new leadership for its tech unit Monument Technology, which provides a banking-platform-as-a-service for banks and building societies (Fintech Futures).

• Banking-as-a-service is entering its 'responsible era’: In partnership with Aion Bank, Sifted looked at the development of BaaS in Europe and asked me to comment as well (Sifted).

• Solaris sells parts of the former Contis business to alternative banking provider Suits Me (Finextra).

• British direct and embedded lending provider iwoca secured £200 million in debt funding from Citi and Waterfall Asset Management, doubled its SME loan offer ceiling to £1 million (Finextra) and exceeded already £250 million of revenue in 2024 (LinkedIn).

• OpenPayd’s founder, Dr. Ozan Ozerk, highlights embedded finance’s progress and the potential use-cases in combination with crypto (Fintech Finance News).

• Adyen now has 25 platforms processing over €1 billion annually, up from 17 the previous year (LinkedIn).