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.
