As a regulated bank that's also a technology company, Frode faces a valuation dilemma. Investors don't apply the high 20-30x revenue multiples of pure SaaS companies, but they also don't use low traditional bank multiples. This 'in-between' valuation reflects its hybrid nature and unique risk profile.

Companies like Optasia leverage mobile phone usage data from telecom partners to provide small loans to millions of unbanked individuals. This model of financial inclusion has created highly valuable "unicorn" companies on the continent.

The regional banking crisis and subsequent regulatory scrutiny forced many banks to exit complex, capital-intensive businesses like asset-based lending to smaller companies. This retreat has eliminated key competition for non-bank lenders, who can step in to fill the void without the same regulatory burdens.

Grab leverages its rich transaction data—like a merchant's daily cash flow or a driver's income—to create proprietary credit scores. This allows it to safely underwrite loans for unbanked individuals and small businesses, a segment traditional banks avoid due to a lack of data.

When a corporate client is acquired by private equity and requires higher leverage, the bank risks losing the entire relationship. By partnering with a private credit fund to handle the loan, the bank can keep the client and all associated high-margin fee-based services like treasury management.

Large financial institutions, which once insisted on building all tech in-house (even email clients), have undergone a cultural shift. Humbling experiences and the clear ROI of AI have made them more open to adopting best-in-class external software, creating a huge market for B2B fintechs.

Private credit is no longer just for borrowers who can't get a bank loan. It's now a preferred choice for institutional players seeking speed, flexibility, and a single point of contact. The value has shifted from just providing capital to offering a superior, less bureaucratic process than traditional lenders.

The traditional separation between legacy banks and fintechs is ending. Banks must adopt fintech's user experience and efficiency, while leveraging their inherent advantages: a large client base and the capacity to manage complex, multi-product relationships. The winner will be a hybrid.

After five years focusing on a direct model in Sweden, Frode pivoted to an embedded, white-label offering. This strategic shift was the key to its rapid growth, enabling expansion into six new countries by leveraging partners' existing customer bases rather than through costly direct acquisition.