Episode 2 of the Embedded Finance Review Podcast, published 18 June 2024. Guest: Peder Broms, co-founder of Cloover. Host: Lars Markull.
Lars Markull: Welcome to the Embedded Finance Review Podcast. I'm your host, Lars Markull. This is our second episode, and this time we switched sides. In the first episode I spoke with Metro, a German food wholesaler that is offering financial services. In this second episode I'm speaking with Peder Broms, who is co-founder and CEO of Cloover. Cloover is an infrastructure provider that offers software and consumer financing products for hardware in the area of renewables.
A simple example: if you want to put a photovoltaic system onto your roof, you could finance the hardware and the installation through the local installation company that partners with Cloover in the background. I'm speaking with Peder about why he started Cloover, what kind of financing products they exactly offer, and how he sees the competitive landscape developing. Let's dive in.
How the customer journey works
Lars Markull: Hi Peder, welcome to the podcast. How are you doing today?
Peder Broms: Hey Lars, all good. Thanks for having me.
Lars Markull: It's great to have you on the show. On Cloover's website it says that you're providing home improvement companies with a plug-and-play solution to offer financing options to their customers. Can you please walk us through a typical customer journey and explain how they can apply for financing and for what kind of products they can use it?
Peder Broms: Yeah, sure. So the journey actually starts a bit earlier, before the customer is even aware of us. And since we only work through installation companies and vendors, we have quite a robust vetting process to get them even onto our platform. Indeed, they might have used our platform already when sourcing deals or getting ready to engage with the customer.
But from the customer's perspective, the installer or the vendor partner will create an offer, either through our platform direct or integrated into their ERP or their CRM system, which sends an offer to the customer with an option to pay with Cloover. So we power that checkout process, and we offer the customer an opportunity to buy with us, and that could be with various payment plans or add-on services like maintenance, worry-free packages, et cetera.
Lars Markull: But if I understood correctly, it's not a pure online user journey, right? So this is basically, if I take an example, myself, who wants to do some home improvement, for example putting a photovoltaic system onto my roof, I contact my local installer, and then that local installer will basically tell me, hey, you can also get a loan directly from me or from a partner in the background, which is Cloover. And then I can obtain the funding through that.
Peder Broms: Yeah, indeed. This is a physical journey for the customer, and usually our engagement is preceded with physical visits by the installation company to the customer, and some interaction in between the two of them. But our processes are hosted online, either on our platform or embedded into the workflow that our installation companies are using.
But once the customer has passed through there, we do manage, let's say, the rest of the process. We manage data collection and underwriting, signing, identification, and then we give the go-ahead for the installer to install.