Embedded finance firms are expanding their regional presence to accelerate revenue and business growth

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Globally, more and more firms, across industry verticals, are embedding banking products to improve their customer experience. This has resulted in the widespread demand for banking-as-a-service providers around the world. From Europe to North America and Africa, more and more businesses are partnering with banking-as-a-service providers. Consequently, to capitalize on the growing demand for embedded financial services, banking-as-a-service providers are seen expanding their regional presence to accelerate revenue and business growth.

• In March 2023, Swan, one of the fast-growing and emerging embedded finance firms in the European market, announced that the firm had opened its first office in Spain. The launch of the new office comes amid the continuous effort of the firm to expand its presence in the European region. With an office in Spain, Swan has established local offices in two European countries, which also includes one in Germany where the firm expanded its presence in 2022.

The banking-as-a-service platform offered by Swan enables any business to offer their customers financial products and services. In the embedded finance space, the firm is recording strong, processing €5 billion worth of transactions annually. Currently, the firm has partnered with hundreds of businesses in ten European countries. In Spain, some of its partners include firms like Payflow, the financial wellness app, and OKTicket, an expense management platform.

From the short to medium-term perspective, Swan is expected to further expand its presence in Europe, with office launches in more countries across the region. Similar trends are also emerging in the North American market, where banking-as-a-service providers are expanding their presence in Canada.

• In March 2023, Synctera, the banking-as-a-service startup, announced that the firm is launching its embedded financial services for businesses in Canada. The expansion in the Canadian market follows the growing demand for its services, which were until now only available to businesses in the United States market.
• As part of its expansion strategy, the firm also raised US$15 million in a funding round, which was led by NAventures, the corporate arm of the National Bank of Canada. The Banc Funds, Veritex Community Bank, Midland States Bank, and Emigrant Bank also participated in the funding round.
• To assist Canadian businesses in launching fintech apps and embedded banking products, Synctera also entered into a strategic collaboration with the National Bank of Canada.

Like Swan, Synctera is also growing at a rapid rate in the North American region. The firm, which is currently working with 50 fintech firms, announced that its revenue is up 20x year over year in Q4 2022. Furthermore, in payment volume, the firm reported a growth of 30% month on month. Some of its partners include firms like Players Health, Solvent, and TipHaus.

Going forward, Synctera is planning to expand its presence in more geographies and client segments. Furthermore, it is also planning to add support for new credit, lending, and other banking use cases. Alongside North America, embedded finance firms in Africa are also raising funding rounds to expand their presence across the region.

• In February, Curacel, the embedded insurance provider, announced that the firm had raised US$3 million in a seed funding round, which it plans to use to expand its presence in more African markets.

Curacel, founded in 2019, has two business verticals. These include insurance distribution and claims automation. The distribution business is embedded insurance product Grow, which is currently used by more than 100 firms, including banks, fintech firms, logistics, and e-commerce platforms. The claim automation business vertical, on the other hand, is solely targeted toward insurance firms. 

In 2022, Curacel reported revenue growth of 500% and transaction volume growth of 600%. With over 5,000 service providers across eight African markets, the insurtech firm has processed more than US$100 million worth of claims, since its inception. With the available US$3 million in funding, the firm is expected to further aid its growth from the short to medium-term perspective.

With the demand for embedded financial services growing at a rapid rate among businesses across industry verticals, PayNXT360 expects more firms to raise funding rounds from venture capital and private equity firms to expand their regional and global presence in 2023. Alongside the fundraising trend, PayNXT360 also expects the merger and acquisition space to heat up significantly in the global embedded finance market from the short to medium-term perspective. This will not only drive the competitive landscape but will also support innovation in the fast-growing sector.

To know more and gain a deeper understanding of the global embedded finance market, click here.