German credit scoring and lending company Kreditech has landed €110m in what it claims is the largest equity investment into German FinTech company to date.
The investment for the Hamburg-based company comes from Naspers-owned online payment service PayU.
Kreditech’s technology aims to combine non-traditional data sources and machine learning to offer credit scores for underbanked consumers normally unable to access credit.
The company also offers loans, digital wallets and personal finance products to help customers manage their spending and credit scores. It also allows partners to plug into its credit products through an API.
As a result of the deal the companies will partner to deliver a joint point-of-sale financing solution with the intention of utilising PayU’s international reach and Kreditech’s credit services tech.
The partnership comes as an expansion of a pilot programme carried out by the two firms in Poland where more than €10m was issued to consumers at sites where PayU powers payments.
Kreditech CEO Alexander Graubner-Müller commented: “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.â€
Based in Istanbul, PayU is wholly-owned by South African web giant Naspers, which will take a minority stake in Kreditech as a result of the deal.
The payments processor focuses on emerging markets and its CEO Laurent le Moal said: “We are excited to build a leading innovative online consumer lending player in high growth markets.
“With our substantial investment we deepen our relationship with the industry-leading management team at Kreditech, and help to bring pioneering machine learning and AI technology to the many high growth markets around the world that need better access to financial services.â€
The investment takes Kreditech’s total funding to more than $282m with the company also counting Peter Thiel, Rakuten and the World Bank’s IFC among its shareholders.
Le Moal says the deal makes PayU one of the most-active corporate investors in FinTech having invested a total of €245m over the past 12 months.
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