Hi from Berlin,
Welcome to this week's Embedded Lending edition.
Something I noticed while writing this edition is that many of the stories include more than one lender. Dojo now works with YouLend and Liberis side by side, and Housecall Pro offers Klarna for smaller jobs and Wisetack for bigger ones. It reminded me of the virtual lending call I hosted in July, where one takeaway was that most platforms start with one lender and add more once they see how different their borrowers' needs are. If you missed it, you can read the recap here. Back in 2024, I asked whether orchestration is the new black in embedded lending, and this edition makes me think the question is coming back.
In this Embedded Lending edition: Dojo and YouLend pass £2bn in merchant funding as Dojo adds Liberis as a second lender, plus DECTA with SAPI, DNA Payments with iwoca, Housecall Pro with Klarna, Airbnb's Reserve Now, Pay Later and Furniture.com with Flex Pay. Also, I included Banxware's first industry report, what CCD2 means for the data behind credit decisions, and Sebastian Seibold (Qred Bank) on how embedded lending is changing SME finance in Germany.
Now let's dive in! 👇
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Embedded Lending News
Dojo passes £2bn with YouLend and adds a second lender: Over six years, the UK card terminal provider and its lending partner have funded more than 30,000 merchants, with YouLend putting the renewal rate at 83%. Merchants apply inside Dojo and repay through a fixed share of future card sales. Strictly speaking, a payments provider sits outside my definition of embedded finance. I am covering it because in February Dojo launched a second funding product with Liberis. So why run two lenders side by side? My read is that they sit at different points in the merchant journey, and Teya and eBay each split their lenders in yet another way. (Read the full story)
DECTA brings SAPI's financing to its UK merchants: The payment company, which also powers other PSPs, has launched its own financing product for UK SMEs, repaid as a pre-agreed share of card sales, with offers typically within 24 hours. The lender behind it is SAPI, a London fintech that reaches offline businesses through the payment providers they already use. So who is SAPI, and why does it work mostly through PSPs? (Read the full story)
DNA Payments adds iwoca loans to its merchant app: One of the UK's larger independent payment companies now lets its merchants apply for an iwoca Flexi Loan of £1,000 to £1m from inside its Merchant Portal and App, with approvals typically within minutes. DNA already offered merchant funding, and this adds term lending. (Finance Connect)
Housecall Pro switches Klarna on by default: The US field service software for home service businesses such as plumbers and HVAC installers has partnered with Klarna, making instalments and longer-term financing available to more than 200,000 users on the platform. Since March, Klarna has been enabled automatically for every new pro who activates Housecall Pro Payments. The pro gets paid upfront, and Klarna carries the credit risk. What I find interesting is that Klarna is not the only lender in there: Housecall Pro's own FAQ positions Wisetack for larger jobs with longer terms. Two lenders in one vertical SaaS product, split by ticket size. (Klarna)
Airbnb's pay later now covers a fifth of bookings: More than 20% of the home-rental platform's gross booking value in Q2 came through Reserve Now, Pay Later, which lets guests confirm a stay without paying upfront. Airbnb credits it with longer booking lead times and higher nightly rates, and widened eligibility again in July. When I covered the global launch in February, the point was that Airbnb built it in-house. The cost Airbnb's CFO has named is a very elevated level of cancellations. (Rental Scale-Up)
Furniture.com finances a whole room across retailers: The AI furniture shopping platform now lets shoppers pick pieces from several independent retailers and finance the whole purchase with one application and one monthly plan, over three to 60 months. Flex Pay, Upgrade's pay-later product, provides the credit, and the shared checkout handles the reconciliation between retailers. The way I read it, the credit is Upgrade's, and what makes it work is Furniture.com owning a single cart across several shops. (PR Newswire)
Also worth a mention: SHOPLINE, the commerce platform with more than 700,000 merchants, has embedded Splitit's card-linked instalments as a plug-in; the UK booking site Alternative Airlines now offers local BNPL in Colombia and Brazil through dLocal, collecting the full fare upfront; and US health and wellness providers on Stripe will soon be able to switch on Synchrony's CareCredit from their dashboard.