Defacto Secures €167M Credit Facility for Embedded SME Financing via API

On July 11, 2023, French startup Defacto announced it had secured a €167 million credit facility to expand its API-based embedded financing platform for small and medium-sized enterprises. The company provides instant short-term loans to SMEs by integrating directly into the platforms and tools businesses already use, including fintech partners like Qonto and freelance marketplace Malt. The credit facility provides Defacto with the capital to underwrite loans distributed through its embedded finance integrations.

The API-first approach allows partner platforms to offer financing at the point of need without building lending infrastructure themselves. Defacto's model represents a B2B2B embedded lending approach where the startup acts as the financing engine behind third-party business platforms. The significant size of the credit facility signals investor confidence in the embedded SME lending model in Europe.

TechCrunch reported the funding as part of Defacto's strategy to become the financing layer for business software platforms across the continent.