German fintech lender scores €110m equity investment

By Ryan Weeks on Wednesday 10 May 2017

Alternative LendingDigital Banking

Kreditech scores major investment from online payment service provider.

Kreditech, the German consumer finance firm, has raised €110m from PayU – a leading payments provider in 16 high growth markets globally.

PayU operates in markets with a potential customer base of 2.3 billion people, and currently supports over 300,000 merchants globally.

Kreditech’s products – which are designed to fit the underbanked – include a digital wallet, a personal finance manager and a broad range of loan types, including micro-loans and point-of-sale solutions. The firm uses machine learning to power lending decisions, and is active across Germany, Russia, Mexico, Spain and Poland.

Kreditech launched a lending-as-a-service product last year, which is key to the PayU investment.

Kreditech and PayU have just completed a 12 month pilot programme in Poland, offering loans to Polish consumers in “real-time”. More than €10m was lent through this programme.

Now, as part of the €110m investment, PayU and Kreditech have agreed to roll out the point-of-sale/lending-as-a-service partnership globally. Kreditech with make its lending technology available to PayU’s 300,000-strong network of merchants globally, via API. These customers will be able to leverage that technology to roll out online point-of-sale credit offerings of their own.

PayU has acquired a significant minority stake in Kreditech, joining an impressive host of investors that includes JC Flowers, Blumberg Capital and Peter Thiel. Kreditech last raised capital in December of last year, when it clinched €10m from the Rakuten FinTech Fund.

“We are thrilled to offer online point-of-sale finance in markets where the development of consumer credit has been severely constrained by the lack of reliable credit risk assessment. Our credit scoring and underwriting technology allows PayU and its merchant partners to offer a competitive, convenient credit product to their retail customers,” said Alexander Graubner-Müller, CEO of Kreditech.

“Teaming up with PayU provides underbanked customers new possibilities and supports our mission of providing financial freedom through technology. At the same time, we enable retailers to reach a new customer group and significantly increase sales volume.”

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