Kreditech is a Hamburg-based provider of loans and point-of-sale financing that uses AI and machine learning to underwrite near-prime borrowers in markets including Poland, Spain, Russia and India. The company originally targeted customers with little or no credit history but shifted in 2017 to focus on near-prime borrowers and has narrowed operations to four core markets. Under CEO David Chan (who joined in 2018) Kreditech emphasizes technology-driven credit scoring and automated underwriting to make real-time lending decisions. It holds a first-of-its-kind digital NBFC license in India and plans to scale aggressively in that market. Kreditech projects it will clear €1 billion in revenues by 2025 and will disclose current turnover and other financials next month. The company has previously raised strategic capital, including a €110 million investment from Naspers’ PayU in 2017, and was valued at around €500 million in its last fundraise. Investors and backers have included Peter Thiel, Rakuten and the IFC. Kreditech builds credit ratings and provides consumer finance in markets with low credit‑history penetration by aggregating roughly 20,000 data points and applying machine‑learning. Its offering is increasingly delivered as a "lending as a service" API that merchants can embed at checkout. The company works with over 300,000 merchants across emerging markets and cites a potential footprint of 2.3 billion users; it has opened an office in India and is hiring there. Kreditech has shifted its loan book toward lower interest rates and nearer‑prime customers to improve credit quality. The firm has tested credit‑card products and may revisit those in future as it expands its product set. Reported revenues are just under €50 million. Kreditech is a Hamburg-based online lender that builds credit histories using big-data analytics and offers point-of-sale loan services. The company announced a $10.4M (€10M) strategic investment from Rakuten’s fintech startup fund, which the company frames as a strategic partnership. To date Kreditech has raised around €152 million in equity financing and earlier this year closed a roughly $105M round. The company’s valuation is reported to be around €300 million ($313M), though Kreditech is not disclosing an official figure. Rakuten’s banking license in Luxembourg and its marketplaces (PriceMinister and Rakuten.de) are cited as potential integration points for Kreditech’s loans. Kreditech says it plans to expand into Asia and other emerging markets and expects the Rakuten relationship to help with that; it is also planning to raise a similar-sized round in the near future. Kreditech builds a suite of credit and banking products for consumers with little or no credit history, using algorithms that weigh roughly 20,000 data points to assess applicants. The company scores users in real time and has scored about 2 million people and extended roughly 500,000 loans to date. It does most business in Poland, Spain, the Czech Republic, Mexico and Russia, and plans to launch in Brazil within the next year. Kreditech operates multiple consumer brands that it intends to consolidate under one brand, Monedo, while increasing average loan sizes to €800–€1,500 from initial €200–€400 microloans. The company remains unprofitable but reported operating losses were halved in the first half of the year versus the same period in 2014, and revenues are growing at a treble rate. Kreditech offers consumer loans by analyzing large sets of alternative data to underwrite customers who lack traditional credit histories. The company uses roughly 20,000 data points grouped into several hundred clusters to score applicants, which yields a relatively low acceptance rate but high repayment success. It recently secured a $200 million credit line to expand lending and has previously used its own profits to fund loans, producing a run rate of about $130 million and prior credit lines totaling $30 million. Kreditech reports rapid growth — 500% year-over-year and 60–80% per quarter — and says it is profitable in the markets it targeted early on. The company is preparing to raise a Series C at an estimated $750 million pre-money valuation and is targeting an IPO in two to three years. Operationally it is based in Hamburg, has roughly 200 employees (over half engineers), has acquired a Polish company to expand its consumer tools and credit-rating services, and plans further geographic and partnership expansion.

Total raised

$511M

Funding rounds

10

Latest round

Equity

Latest activity

Sep 2019