Germany-based Kreditech that specializes in digital consumer credit using machine-learning based underwriting has secured €110 million from global online payment service provider PayU. This is touted to be the largest-ever equity investment in a German FinTech firm. PayU has acquired a significant minority stake in Kreditech, joining existing prominent fintech investors including JC Flowers, Varde, Blumberg Capital, HPE, Peter Thiel, Rakuten and the World Bank’s IFC. The

The other details of the round have not been disclosed. The valuation of the company is said to have exceeded $300 million but has not been able to touch the $500 million mark.

The announcement is followed by a successful pilot program in Poland which was managed by both the entities. They offered Polish consumers improved access to credit in a real-time online process. The program resulted in issuing of over €10 million in credit. Laurent le Moal, CEO at PayU, mentioned,

At PayU we believe in the enormous potential of technology to unlock credit and financial services for underserved populations. In the past 12 months, we have become the leading corporate venture capital investor in FinTech, investing more than EUR 245 million around the world. This latest investment in Kreditech fits perfectly with this vision.

Both the firms have also inked a global partnership to deliver a joint proposition for Point of Sale Finance. Under the deal, PayU and Kreditech will aim to provide innovative credit services to underbanked markets around the world, combining strong international footprint of the former with technology offering of the latter. Alexander Graubner-Müller, CEO of Kreditech, was quoted saying,

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.

Kreditech works to empower the underbanked giving them the privilege of financial freedom using technology. It brings together traditional data sources and machine learning to provide easier credit access and higher convenience for digital banking services. It offers consumer loans, a digital wallet, and a personal finance manager designed to assist users in managing their credit score and plan their spending.

With its “Lending as a Service” model, it enables partners to integrate Kreditech’s credit products via an API into their own platform and services. The partners also get to gain access to the complete Kreditech consumer lending value chain including loan application management, credit risk management, know your customer principles (KYC), e-signature, loan refinancing, loan processing and servicing, collections as well as customer service. Alexander, in a statement, mentioned,

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.


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