Lemonero, a Czech fintech, has raised a seed round from Komerční banka, a Czech bank and a member of the French financial group Société Générale. It’s a €12m round, according to a person familiar with the transaction, which makes it one the biggest seed investments in the Czech Republic.

What does Lemonero do?

Lemonero is based in Prague and has been operating since November 2020. It’s an AI-driven lending tool for small and middle-sized online businesses, such as marketplaces and online shops. The company says it works with hundreds of online stores in central and eastern Europe and has provided loans worth tens of millions of euros.

What’s the market like?

Lemonero is tapping into a growing market of embedded finance solutions, which could be worth $43bn globally in 2021, according to data by research company Juniper Research — and a whopping $3.6tn by 2030, according to analysis from Bain Capital Ventures.

The company’s main competitors are fintechs like UK-based Liberis and German startup Banxware. 

Who’s investing in Lemonero? 

  • KB SmartSolutions — a subsidiary of Komerční banka, which helps the Czech bank to invest in new technologies from the financial sector. It has also invested in other Czech fintechs, such as Upvest and Roger. Komerční banka was also a lead investor in the company’s previous pre-seed round.  
  • The majority stakeholders in the company remain its founders. 

What’s next for Lemonero?

Lemonero wants to use the funds for European expansion, primarily to France and the Netherlands, and later to the DACH region and eastern Europe. The company is also working on the development of a new product for cash flow management.

Sifted take

The investment rides a wave of growth and interest in the embedded finance sector. But the question is if Lemonero will be able to scale its experience within its local region to more competitive Western markets. 

The example of Uncapped shows it’s possible — the Warsaw-born and now London-based startup, which provides funding for online businesses, recently raised $80m in debt and equity funding to expand its revenue-based lending platform (but has recently also laid off 26% of its staff).

Zosia Wanat is Sifted’s central and eastern Europe reporter, soon to be based in Warsaw but currently in Brussels. She tweets from @zosiawanat

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