What happens when traditional banks abandon an entire industry, leaving thousands of small businesses struggling with cash flow constraints? In the jewellery trade, this challenge became an opportunity for innovation. Stefan Scherpenborg, Head of Nivoda Capital, joins the Embedded Finance Review podcast to share how they built a revolutionary embedded credit solution that's transforming how jewellery retailers access inventory financing. From leveraging marketplace transaction data for superior underwriting to creating an invisible checkout experience, Stefan reveals the strategic decisions behind building fintech infrastructure within a B2B marketplace serving over 10,000 jewellery retailers globally.
Traditional Banking Exits Create Embedded Finance Opportunities
The jewellery industry faced a significant challenge when traditional financial institutions began pulling away from the sector over the past decade. This exodus created a financing gap that marketplace-native solutions were uniquely positioned to fill.
- Why banks retreated from jewellery financing - Risk assessment challenges due to limited public data on small jewellery businesses and industry-specific complexities
- Data advantage of marketplace lenders - Nivoda's access to real transaction data, payment behaviour, and customer trading patterns enables superior underwriting compared to traditional credit providers
- Serving underbanked small businesses - Most jewellery retailers are SMBs with limited access to public financial data, making it difficult for external lenders to assess them accurately
- Industry specialisation benefits - Deep understanding of jewellery trade cycles, seasonal patterns, and inventory management creates competitive advantages in risk assessment
Buy Now Pay Later Evolution: From Consumer Credit to B2B Growth Financing
Stefan introduces Nivoda's unique philosophy of "Buy Now, Grow Faster" - a fundamental shift from traditional buy now, pay later models that prioritise customer growth over immediate lending profits.
- Beyond traditional BNPL models - Focus on removing capital constraints to enable business growth rather than maximising credit revenue
- Invisible checkout experience - Embedded credit that requires minimal friction, with preset limits allowing seamless ordering without payment delays
- Growth partnership approach - Credit as a tool to help jewellery retailers expand their businesses, increase inventory, and serve more customers
- Success metrics redefined - Measuring success by customer growth and marketplace transaction volume rather than standalone lending profitability
Building Fintech Infrastructure Within Marketplace Ecosystems
Nivoda Capital's development showcases a strategic hybrid approach to building embedded finance products, striking a balance between speed to market and long-term scalability and compliance requirements.
- Hybrid partnership strategy - Combining third-party decision engines and compliance support with in-house data control and orchestration
- Minimum viable partnerships - Working with specialised vendors for specific capabilities while maintaining control over core data and customer relationships
- Compliance-first scaling approach - Building strong compliance foundations early to support long-term growth and regulatory requirements
- In-house capability development - Gradually building proprietary credit models and risk assessment tools while leveraging external expertise for non-core functions
Marketplace Data Advantages in Credit Underwriting
Access to first-party transaction data creates significant advantages for marketplace-embedded credit providers compared to traditional lenders who rely primarily on external data sources.
- Transaction-level insights - Real-time visibility into customer purchasing patterns, order frequency, and payment behaviour across the platform
- Customer relationship depth - Existing KYC processes and ongoing business relationships provide a comprehensive customer understanding
- Industry-specific risk factors - Understanding jewellery trade nuances like seasonal fluctuations, bespoke order lead times, and inventory management challenges
- Predictive analytics capabilities - Using marketplace data to identify growth potential and creditworthiness signals not visible to external lenders
Global Expansion Strategy for Embedded Finance Products
Stefan outlines Nivoda Capital's three-horizon approach to scaling embedded credit internationally, from operational stability to revenue optimisation and geographic expansion.
- Horizon 1: Foundation building - Establishing stable core performance, compliance infrastructure, and unit economics validation
- Horizon 2: Revenue optimisation - Partnering with institutional lenders, refining credit models, and optimising pricing strategies
- Horizon 3: Global scaling - Leveraging Nivoda's international marketplace presence to expand credit offerings across multiple geographic markets
- Product evolution roadmap - Future opportunities in inventory management solutions, virtual auditing, and revenue-based credit products
Lessons for Building Embedded Finance in Vertical Marketplaces
Stefan's transition from traditional banking to marketplace fintech provides valuable insights for entrepreneurs and product leaders considering embedded finance initiatives.
- Customer-centric vs. regulation-first approach - Opportunity to build truly customer-focused financial products rather than working backwards from regulatory constraints
- Industry expertise importance - Deep understanding of vertical-specific challenges and opportunities enables better product-market fit
- Organisational alignment necessity - Ensuring company-wide understanding and support for embedded finance initiatives across engineering, product, and sales teams
- Entrepreneurial mindset requirements - Balancing operational execution with strategic planning while building new business lines within existing organisations