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Lessons from Fresha: How to scale embedded Capital to seven markets
Learn from Fresha's Chief Payments Officer on how they launched embedded Capital across seven markets in just three weeks.
What if 89% of customers who tried a new product came back for more? For Fresha, that's exactly what happened when they launched embedded Capital.
By embedding financial services directly into their platform, Fresha gave customers access to funding and solved their biggest challenge: cash flow.
Within weeks of launch, they had funded over $8M in Capital across 140K businesses.
In our recent webinar, we spoke to Fresha's Chief Payments Officer, Pawel Iwanow, about the embedded finance opportunity, how they built a funding experience, and the four lessons behind making it a success.
The SMB funding gap: A $48B opportunity
Small and medium-sized businesses (SMBs) struggle to access funding, often due to extensive paperwork and slow approvals. Meanwhile, 60% experience cash flow issues, and 34% are turned down by traditional banks.
SaaS platforms are well placed to solve this through embedded Capital. With visibility into their customers' daily sales, they can offer pre-approved loans at exactly the right time.
This creates a significant opportunity: a $48B addressable market across North America and Europe.
Designing a funding experience that scales
For Fresha, the decision to offer embedded Capital was obvious:
"“From day one, the question wasn’t if we’d launch Capital, it was when. Our strategy has always been to go beyond SaaS and empower the entire ecosystem," says Pawel.
To bring this vision to life, Fresha built their funding experience on these key principles:
Pre-approved offers: Eligibility is automatically determined based on their customer’s payment history on the platform.
Instant funding: Once approved, funds land directly into the business’s Fresha wallet in minutes.
Transparent pricing: There are no compounding interest rates or hidden fees, just one flat fee.
Automated repayments: Repayments are deducted automatically as a fixed percentage of daily sales, so customers simply pay as they earn.
In three weeks, Fresha launched their embedded Capital offering across seven markets.
And within weeks of going live , they’d already funded over $8M in Capital to their customers.
4 lessons from scaling Capital to $8M+ in funding
According to Pawel, the success of Fresha’s Capital offering is due to:
1. Partnering instead of building from scratch
While Fresha initially tested Capital manually, they knew that scaling to 140K businesses required a robust partner.
With Adyen, Fresha could control the user experience via an API integration while Adyen handled 100% of the credit risk and compliance, leaving Fresha with zero liability and full flexibility.
2. Phasing the rollout strategically
When launching across multiple markets, Fresha inverted their usual rollout strategy. Instead of a mass launch, they started with a "white glove" approach for their largest customers. This allowed their account managers to gather early feedback on loan sizing and application flows.
Once the product was proven, they made it available to their broader user base.
3. Keeping support simple and multi-tiered
Offering Capital doesn’t have to burden your operational team. Fresha handled support by creating a clear, tiered structure:
First-line: An AI chatbot (Nova) and human CX agents, armed with comprehensive help center articles, handle basic inquiries.
Second-line: Specialist agents handle nuanced questions about early repayments or larger amounts.
Third-line: Adyen steps in for the most complex, product-related queries.
"The help center needs to be robust and that's all it takes. It's really no heavy investment here to launch and get Capital off the ground."
Pawel Iwanow,
Fresha's Chief Payments Officer, Fresha
4. Letting Capital drive retention organically
Fresha placed Capital inside the platform's digital wallet, a natural touchpoint for users. Combined with automated email marketing and in-app notifications (which drive 70% of applications), the product sees strong organic uptake.
More importantly, the retention numbers speak for themselves: 89% of Fresha users who take a loan return for a second one.
“When a partner gets a loan, it creates real stickiness, not just because they repay it, but because we helped them grow," Pawel explains. "They come back to open the next location, and the next. That’s why repeat usage is so high."
Drive growth and retention with Capital
Fresha's experience shows that embedded Capital creates value on both sides:
For SMBSs, fast access to funding unlocks opportunities that might otherwise be out of reach. One Fresha customer saw a 22% increase in sales after using a loan to invest in seasonal marketing.
For SaaS platforms, it adds a new revenue stream, strengthens relationships, and helps them become a more integral part of their customers’ growth.
