Fintech Kreditech Says Break Even Cash Flow by 2020 as 2018 Loss Shrinks

German online lender Kreditech says the company is on track to “reach profitability in the near future,” as operating loss shrinks. Simultaneously, revenue and originations both declined.

The Fintech claims significantly improved performance as a result of a new strategy that was implemented in 2018. Kreditech has gone through numerous changes in the past year or so, including a change in executive leadership.

According to Kreditech, their net financial results in 2018 improved by 76% compared to the year prior. Kreditech says that achieving profitability is being driven by an “evolution of the product portfolio, investment in innovations and effective cost-management measures.”

Kreditech also closed on a recent funding round while announcing plans for expansion.

Kreditech lends through its consumer brands including Monedo Now and Kredito24, as well as through partners in four markets: India, Poland, Russia and Spain.

In 2018, the company focused on pivoting its operations toward the near-prime lending market, with installment loans as a key product.

Kreditech reports that during 2019, it has “successfully transitioned” back to growth in its core installment loan product and has achieved its highest-ever levels of monthly installment loan issuance.

David Chan, Kreditech CEO, commented that their results clearly indicates they have made excellent progress in accomplishing their objectives:

“We successfully expanded into the near-prime segment in most of our major markets, and we have continued, and will continue, in this strategic direction throughout the whole of 2019,” said Chan. “Our growth is supported by investments in core infrastructure and the successful opening of exciting new possibilities, such as obtaining an NBFC license in India, which enables us to expand in this high-potential market.”

Kreditech’s net losses fell by 76%, from € 58.4 million in 2017 to € 13.9 million for 2018. Revenue fell by 21.4% from € 71.4 million in 2017 to € 56.1 million in 2018.

The drop in revenue was made up for by a reduction in impairments.

The net result was an increase in gross margin (+32.3%) and a gross rate of return (38.7% in 2018, up from 23.0% in 2017).

In 2018, Kreditech issued € 107.3 million of credit across all of the markets in which it provides lending services. In 2017, lending was €185.2 million – a 42% decline.

The company generated revenue from core products amounting to € 56.1 million. This represents a decline of approximately 21% compared to the previous financial year, which is said to be a reflection of Kreditech’s shift in strategic product focus from high-yield and short-term microloans with higher risk, to long-term installment loans, demand for which is said to be increasing.

Kreditech’s mission is to be the global leader in technology-enabled consumer lending and the platform of choice in the near-prime market.

Germany: Kreditech Gains €20 Million in Equity Financing, Plans Global Expansion

Online lender Kreditech has raised €20 million in its latest funding round, according to a note from the company. Apparently, the additional capital will help the Fintech scale globally in its goal to provide credit to near-prime customers. The funding was co-led by Runa Capital and a German private investor, with participation from long-time existing shareholders, HPE Growth and Amadeus Capital Partners.

The Germany based online lender and point of sale platform predicts it will top €1 billion by 2025. Growth will be driven by operations in existing markets as as well as expansion into new geographies.

Kreditech currently operates in India, Poland, Russia and Spain, and reports serving over one million customers.

Since 2018, Kreditech says it has been focused on scaling its near-prime lending operations and driving toward profitability.

David Chan, Kreditech CEO, states:

“We are on track to realize our vision, which is to be one of the leading technology-enabled consumer-lending companies; a Fintech platform of choice for both individuals and POS and e-commerce partners. With a new strategy in place, a solid capital base and our highly motivated and experienced team, we are perfectly positioned to achieve our goals.”

Chan adds:

“We have a well-established presence in Poland, with strategic partnerships in a very dynamically growing e-commerce market. In Spain, we are in a very strong position as a recognized consumer lending brand, and we are growing rapidly in the near-prime market. In Russia, we are a leading online lender, locally self-funded, and targeting expansion into installment loans.”

Chan says he is very excited about growth plans in India where they hold a “first-of-its-kind digital NBFC”
(non-banking financial company) license in the market.

“We have been successful in finding our niche and have established the right proof of concept. Now it’s time to scale up while a key target customer segment remains unaddressed by the competition,” says David Chan.

In October 2019, Kreditech states that it will publish its financial statement for 2018. Chan says the results will show the positive impact of the new company strategy on its trajectory and overall performance.

“I am proud to say that we are on track to reach our target for profitability of the company. Our platform is designed to facilitate rapid, profitable growth.”

Andre Bliznyuk, General Partner at Runa Capital, commented on the funding:

 “We are excited to be partnering with Kreditech as it continues on its path to becoming a global leader in digital near-prime lending. We believe that access to credit will continue to be improved through innovation and we see Kreditech as the emerging leader in this space, especially considering its presence in multiple fast-growing markets around the world.”

Tim van Delden, co-founder of HPE Growth, stated:

“We are keen to support Kreditech. We have great trust in the new management team that Kreditech put in place in 2018.
Kreditech’s track record over the last eighteen months, together with its business focus, strategy refinement and path to profitability has been truly impressive. For these reasons, HPE is convinced that Kreditech has the right management team to scale the business into the near-prime market. Kreditech’s core pillars of success remain the same – it is a technology and data-driven company that is able to use machine learning scoring models to make credit decisions in real-time and with greater accuracy.”

Kreditech Shakeup: Founder Alexander Graubner-Müller Steps Down As Managing Director

Kreditech, a Germany-based fintech that’s targeting the digital banking space, announced on Friday that its founder and former CEO Alexander Graubner-Müller is stepping down from his operational role as a managing director.

Graubner-Müller reportedly co-founded Kreditech with Sebastian Diemer in 2012 and after initially acting as chief technology officer, he led the company as CEO from December 2015 until April 2018. Under his leadership, Kreditech claimed it has grown to more than 850,000 customers, 400 employees and €70 million in annual revenue while having secured more than 250 million euros in funding from leading investors around the world. Speaking about the company’s growth throughout the years, Graubner-Müller stated:

“We appointed several new executives in 2018, including David Chan as CEO. We’ve hired world-class experienced leaders in technology and financial services to take Kreditech to the next stage. With such an amazing leadership team in place, I feel it is the right time for me to fully pass on my duties to David and withdraw from the day-to-day operations of the company.”

Giles Andrews, Chairman of the Board, Kreditech, also commented:

“In the name of the shareholders and the board I would like to thank Alexander for his drive, his incredible dedication to the company and his tireless pursuit of Kreditech’s mission to improve access to credit for underbanked consumers around the world. We wish him all the best for his future endeavors.”

Kreditech went on to add that Graubner-Müller will support the fintech as founder and shareholder while focusing on new opportunities as an investor and entrepreneur.

PayU Collaborates With Kreditech to Launch Instant Cardless EMI With PayU Monedo in India

On Wednesday, global online payment service provider PayU announced it is collaborating with Kreditech, a digital consumer lending group that uses machine-learning based underwriting, to launch the beta phase of PayU Monedo in India. According to PayU, PayU Monedo is set to provide cardless EMIs (equated monthly installments) to finance the online purchases of consumers in India. The offering notably follows the launch of a strategic partnership between PayU and Kreditech announced in May 2017 to deliver a joint proposition for cardless EMI.  The partnership saw 110 million investment from PayU in Kreditech. 

“With PayU Monedo, PayU and Kreditech aim to bridge the credit gap for the banked and underbanked population in India by offering instant short and medium-term shopping credits for their cart amount at the checkout of popular e-commerce websites. PayU Monedo combines PayU’s massive 300,000+ merchant distribution network with Kreditech’s expert machine learning-based real-time underwriting capabilities and its lending-as-a service platform Monedo. This integration allows customers to receive credit in less than two minutes for their online purchases at charges comparable to local banks. Loan amounts are granted at up to 2K USD. The duration of the credit line and interest rates for cardless EMI are dynamic and entirely dependent on the likeliness of the individual customer & the merchants to repay the loan.”

While sharing more details about the partnership, Shailaz Nag, MD & Co-founder at PayU India, stated;

“Our newest consumer offering of cardless EMI in partnership with Kreditech bridges the underlying gap for credit. PayU’s goal is to offer more shopping opportunities to those who, for various reasons have no access to credit. We help online shoppers to buy the latest mobile phones, laptops, consumer durables & much more on easy EMI without a credit card. PayU Monedo is easy to use, quick and offers flexibility. We are already talking to merchants in the e-commerce, travel and other online sectors and are looking forward to providing this innovative technology as an alternative payment method in the checkout process.”

Alexander Graubner-Müller, CEO at Kreditech also commented:

“Both PayU and Kreditech share the same mission to increase the financial freedom of people with limited access to banking services”, states . “At Kreditech, we have developed a proprietary credit scoring technology which uses artificial intelligence and machine learning to assess an applicant’s creditworthiness in seconds and with higher precision than traditional credit-bureau based systems. By teaming up with PayU, we are going to offer attractive loans to individual consumers with flexible terms of repayment. This is the first partnership between a payment provider and an alternative lending company and we are thrilled to have kicked-off our joint business in India. We are bullish about our foray in India and will be setting up an office in Mumbai.”

PayU then added that Kreditech India will be operated out of the Mumbai office led by Ashish Kohli as country-manager.

 

Kreditech Receives €110 Million Investment from PayU in Largest Ever Investment in German Fintech

Kreditech, a Hamburg, Germany based Fintech company targeting the digital banking space, has received a €110 Million equity investment from PayU – a leading payments provider. The investment is the largest ever for a German Fintech firm. PayU has now acquired a significant minority stake in Kreditech, joining existing Fintech investors including JC Flowers, Varde, Blumberg Capital, HPE, Peter Thiel, Rakuten and the World Bank’s IFC.  The specifics of the deal were not disclosed.

Alexander Graubner-Müller, CEO of Kreditech, commented on the agreement;

“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. 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.”

Laurent le Moal, CEO at PayU, said they were excited with the potential of the partnership with Kreditech to build a leading online lender in 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. 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.”

The agreement between Kreditech and PayU includes a global partnership to deliver a joint proposition for Point of Sale Finance. The partnership combines PayU’s broad international footprint with Kreditech’s technology to bring innovative credit services to underbanked markets around the world.

Kreditech said it will expand its Lending as a Service (LaaS) offering and deliver its AI and machine-learning credit underwriting and loan management technology to PayU’s 300,000-strong network of merchants.

The investment follows a pilot program managed by Kreditech and PayU, offering Polish consumers improved access to credit in a real-time online process. The pilot program was said to have issued more than € 10 million in credit.

The investment by PayU was said to be part of a global plan to build on its payments heritage to become a leading Fintech provider in high growth markets. PayU has a solid track record building payments businesses in markets, including Eastern Europe, India and Latin America.

Kreditech will, of course, expand into new territories through its partnership with PayU.

Kreditech’s and PayU’s non-exclusive partnership was described as the first strategic cooperation pact between a payment service provider and a technology driven consumer finance company.

Founded in 2012, Kreditech’s Lending as a Service product line is an API-based solution which enables partners to offer customized consumer finance products to consumers. Partners 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.

Kreditech Group’s mission is to improve financial access for the underbanked with the use of technology. Combining non-traditional data sources and machine learning, the company is aiming to provide access to better credit and a higher convenience for digital banking services. Kreditech currently covers more than 5 markets worldwide, including Russia, Mexico, Spain and Poland. The company has processed more than four million loan applications through its subsidiaries.

Kreditech Appoints Senior Global Bankers to Advisory Board

Online lender Kreditech has appointed two senior bankers to its advisory board. Former CEO of Vanquis Bank, Michael Lenora and CEO of OneSavings Bank, Andy Golding will now help provide guidance to the Hamburg-based Fintech tirm.

Kreditech, a consumer lender and “Credit as a Service” provider, seeks to further its mission to provide access to credit to the underbanked. Lenora and Golding will now aid in this mission.

Lenora brings more than 30 years of experience within the consumer financial services industry which includes expertise in both consumer lending and credit cards. Lenora previously served as Managing Director of Vanquis Bank – a consumer finance company of Provident Financial Group – from 2007 until 2016. Vanquis Bank offers credit cards for UK residents with limited or uneven credit history, a business described as having many parallels to Kreditech. Prior to this, Lenora worked in senior management positions at Barclaycard International and Associates First Capital Corporation (Citi). Lenora aslo founded a charity called Hatua to support schooling and education in Africa.

Golding is currently CEO of OneSavings Bank PLC in the UK. He has worked in the consumer financial services industry for over 30 years having held senior positions at NatWest, John Charcol and Bradford & Bingley.

Prior to joining OneSavings Bank, he was the CEO of Saffron Building Society, a UK mortgage lender.

Alexander Graubner-Müller, CEO and Founder of Kreditech, commented on the new advisory board members;

“Having Michael and Andy on our advisory board is a great strategic and personal fit for Kreditech. We are very excited to benefit from their expertise to build market-leading consumer finance businesses, that will help to grow our business with the ultimate goal to succeed in bringing financial freedom to the underbanked.”

Lenora and Golding join the existing advisory board consisting of additional four members, Peter Yordan from J.C. Flowers, Elena Lieskovska from Värde Partners, David Blumberg from Blumberg Capital and Manfred Krikke from HPE Growth Capital.

 

Kreditech Appoints Former mBank Managing Director Michal Panowicz as CPIO

On Thursday, consumer finance technology group, Kreditech, announced it has appointed Michal Panowicz is joining as Chief Product and Information Officer (CPIO).  

Kreditech stated Panowicz’s career highlight was a complete digital transformation of the third largest bank in Poland,  mBank, and growing it to one of the most recognized brands in financial innovation worldwide. The revolutionary digital services launched by Panowicz’s teams received 14 global awards for financial innovation, from both banking and fintech audiences, such as “Efma Most Disruptive Innovation,” “Finovate Best of Show” and “Celent Model Bank.”

Future of Banking by The Economist in Paris March 10th 2016 2While sharing details about Panowicz’s appointment, Alexander Graubner-Müller, CEO and Founder of Kreditech revealed:

“We are thrilled to have Michal become part of our team and I am personally proud to welcome such recognized and inspiring leader with a long-track record of building highly successful digital financial services. Product and technology are the key value-drivers of our company and with Michal we bring on board the experience and leadership required to realize our ambitious product vision..”

Michal Panowicz went on to add:

“I am excited to join Kreditech and am fully committed to its vision of improving financial freedom for the underbanked. Together we will build world-class engineering and a cutting-edge digital finance product for the many people that have been deprived of the benefits from the traditional financial system. In this untapped market, Kreditech has already built an impressive trajectory – with yet a huge potential to tap into.”

Kreditech noted that in the newly created role of the CPIO, Panowicz would be responsible for the product and technology departments.

Kreditech Announces Online Point-Of-Sales Financing Launch: Reports Beta Phase Integration with Naspers’ E-Payments Division

On Wednesday, consumer finance technology company Kreditech announced the launch of its new business line, Online Point of Sales (POS) Financing. The first client, PayU Global BV, is a payment services provider and the e-payments division of Naspers Ltd., deploys Kreditech’s B2B2C solution. In the beta phase, PayU is reportedly providing Kreditech’s installment products as a new alternative payment option. 

Kreditech 1Kreditech shared that the new integration allows customers to instantly finance their online purchases at charges comparable to local banks.

“Loan amounts are granted at up to EUR 5,000 and for a duration of up to 36 months. The process is fully paperless and is based on Kreditech’s innovative scoring technology combining it with state of the art KYC. Its user experience and user interface focus on the highest convenience for the customer.”

Alexander Graubner-Müller, CEO and co-founder of Kreditech, stated:

Future of Banking by The Economist in Paris March 10th 2016 2“Launching our POS Financing product is a major step of our business strategy to expand consumer lending on a B2B2C level. We are already in talks with further clients in the e-commerce, travel and other online sectors and look forward to providing our innovative technology as an online payment method in the checkout process.”

James Caviness, VP product and innovation at PayU Global, added:

“Our primary goal is to provide the most convenient and innovative payment solutions to our users globally. We believe in Kreditech’s approach for credit rating and its focus on the best user experience when it comes to consumer credit. Therefore, we hope that the positive feedback of our users will lead to a stronger collaboration with the Kreditech Group.”

Fintech Startups and The Future of Banking

whirlpool vortex change disruption

Will fintech startups cause the demise of banks or come to their rescue? This was one of the topics debated at The “Future of Banking” event held by The Economist in Paris on March 10th 2016.

The Future of Banking was aptly subtitled “Survival of the nimblest” reflecting the current existential questioning about the future of banks, including the notorious too-big-to-fail banks of Europe. Although many of these banks are still is reporting healthy profits (€23 billion in profits for the top 6 French banks in 2015), bank stocks were severely hit during the stock market downturn at the beginning of this year.

Future of Banking by The Economist in Paris March 10th 2016 2

Unbundling the Banking Business

Part of the worry revolves around the role that fintech startups will play in the future of the banking sector: threat or opportunity?

 

Edward McBrideEdward McBride of The Economist phrased the question as:

“Can banks successfully integrate fintech startups by buying, copying or working with them, or will fintech startups, coming each from a different angle such as payments, wealth management, equity or credit, progressively nibble at the banking business, unbundling it to pick up the value creating parts and leaving to banks the thankless task of producing commoditized financial products?”

Executives from the best fintech firms including Crowdcube, Transferwise, iZettle, Fidor Bank, Number26, Kreditech and Nutmeg were invited to debate this issue along with prominent bankers from banks such as BBVA, ING and BNP Paribas. Unsurprisingly, most fintech leaders argued that fintech startups and network of startups would indeed suck banks dry. Their arguments went as follows:

  • Banks are not customer-centric, fintechs are. Banks have lost a lot of trust. Customers are waking up to the low level of service traditional banks provide, which makes them as prone to disruption as French taxi drivers. Fintechs are customer-centric; they’re obsessed with improving the customer experience.

“People are dissatisfied with existing financial services, we’re only 5 year old, but every day we onboard thousands of new businesses.” Jacob de Geer, Co-Founder and CEO, iZettle.

 

“If you project the growth of fintech startups 10 year out, you can see how the market will shift. Our The Future of Finance research shows that 50% of consumers expect to use a tech company to handle their finances in five years’ time and… 20% anticipate that they will trust technology providers for all financial services in ten years.” Taavet Hinrikus, Co-Founder and CEO, Transferwise.

 

Mondo Mastercard“Customer readiness to switch away from traditional banks is well evidenced by the fact that startup bank Mondo was able to raise £1 million from retail investors in 96 seconds on Crowdcube.” Darren Westlake, CEO and Co-Founder, Crowdcube.

  • Banks can’t match fintech’s innovation culture. Banks lack the agility to adapt to fast-changing consumer behaviors such as the customers’ shift to mobile. Fintechs have a lean management culture of constant and quick adaptation.

“Our main advantage is speed, the speed at which we integrate new things and adapt to them… and the speed at which we deliver the customer experience. In a downturn we’ll be adapting faster than others. We operate in Russia and we adjusted our model to the recession there.” Alexander Graubner-Müller, Co-Founder and CEO, Kreditech.

  • Banks are weighted down by their legacy systems. Mainframe back offices eat up more than 80% of banks’ IT budget and even more of their energy. fintechs start from scratch with cloud-based open systems and open APIs that enable them to integrate with each other.

“The potential of fintech startups working together by mashing up our services is much more powerful than the current universal banking model.” Darren Westlake, CEO and Co-Founder, Crowdcube.

  • Money Dollars Art 100Banks are hampered by regulation. Basel III, PSD2, Capital Union… compliance costs cripple banks. Smaller fintech work they way through and around regulation: some, such as crowdfunding platforms, benefit from relaxed regulations, others fly under the radar, and others simply view regulation as an opportunity.

“Every financial services company is strictly regulated. KYC (Know Your Customer), AML (Anti- Money Laundering)… we’re not complaining and whining about it. We look at it as a massive opportunity. We rewrite the process from the ground up. We can onboard a business in a compliant way in 5 minutes.” Jacob de Geer, Co-Founder and CEO, iZettle.

To these four arguments, one could add that banks are viewed by their investors as cash cows that must return profits whereas Fintech startups, by contrast, as venture investments, are expected to make losses or reinvest whatever profits they make. The leading startups are flush with cash and make very expensive acquisition targets. For example, payment startups Transferwise and iZettle are so-called unicorns, i.e. startups already valued at more than $900 million.

Future of Banking by The Economist in Paris March 10th 2016

Becoming Banks

Summarized as above, the case for fintech startups seems pretty compelling.

However, opposing nimble fintech startups to sluggish banks is an oversimplification. The fact is that becoming an efficient part of an unbundled financial services value chain is all but easy:

“We rebuilt our entire systems last year. It was the worst year in the company’s existence but it’s the only way to compete.”  Nick Hungerford, Co-Founder and CEO, Nutmeg.

In addition, as Ben Robinson, Chief Strategy and Marketing Officer at Temenos, observed, many startups operating in the unbundled model feel limited by their dependency on their partner bank.  As they become more successful, they tend, like PayPal did, to seek a banking license and become more vertically integrated.

Fidor BankThis was Fidor Bank’s strategy from the start:

“Fidor Bank is about creating customer lifetime value, not accumulating losses with high customer acquisition costs but cross-selling to existing customers. To that end, we offer good products, great user interface, never compete on price but always give a fair price, and we nurture a community of customers who exchanges day to day on money matters. To do all this we need a banking license. Our banking license is our declaration of freedom. It enables us to operate our customer-centric operations on a very cost-efficient infrastructure.” Matthias Kröner, Co-Founder and CEO, Officer, Fidor Bank

Unbundling banks or becoming one of them? There may not be a single winning strategy. As Sean Park, Founder, Chairman and Chief Investment Officer of Anthemis Group, puts it:

“It’s not a question of label, it’s a question of your business model, of knowing where you fit in the stack and how much value you deliver there. “


 

Therese TorrisTherese Torris is an entrepreneur and consultant in eFinance and eCommerce based in Paris. She has covered crowdfunding and P2P lending since the early days when Zopa was created in the United Kingdom. She was a director of research and consulting at Gartner Group Europe, Senior VP at Forrester Research and Content VP at Twenga. She publishes a French personal finance blog, Le Blog Finance Pratique.

Kreditech Raises €82.5 Million in Series C Funding Round

Euros 200 MoneyBig data company Kreditech is on a “simple mission to build a ‘digital bank’ for everyone” now has more money to accomplish its goal.  Kreditech has just announced it has raised €82.5 million in a Series C funding round led by JC Flowers.  Existing investors Peter Thiel, Amadeus, Värde Partners, HPE Growth Capital and Blumberg Capital all participated in this most recent round. Kreditech also stated it was in “advanced discussions for an additional closing” that would push the raise to over € 100 million.

“We are excited to bring these world-class investors on board who will support us in strengthening our integrated financial services platform, bringing us closer to our vision of becoming the ‘digital bank for the underbanked’,” said Kreditech’s Co-Founder and CEO Sebastian Diemer.  “We are a technology company, but also a provider of consumer financial services, and we are fortunate to have a sophisticated shareholder group whose experience and network spans both areas.”Sebastian-Diemer

Kreditech states it has scored over two million individual loan applications, using up to 20,000 data points per application.  Kreditech offers products from individually tailored installment loans and microloans to payment and other financial services.

Kreditech’s CFO Rene Griemens said the addition of high profile investors like JC Flowers and Peter Thiel was a “major validation of our business model.”  He stated that Kreditech has now raised over €300 million in both debt and equity.  Approximately €160 million are unused debt facilities.

Loren Felsman of J.C. Flowers will join the company’s board;

“There are people without access to fair and affordable credit in every market we have analyzed, and technology is enabling new and better ways of offering credit to these customers,” said Felsman. “Kreditech has developed a remarkably sophisticated approach to real-time consumer banking, and focuses on markets that are relatively less well-served by traditional credit bureaus and financial services providers.  Most lenders, including those built on modern technology, may not crack these markets for years.”

Andrew Traversone of Amadeus said Kreditech has “enormous potential to overtake traditional banking models in the future”.  Traversone said they were very impressed by Kreditech’s speed of execution and business model.

 

Consumer FinTech Company Kreditech Hires Oliver Prill as COO

Oliver Prill - KreditechHamburg, Germany based Kreditech has added to its executive team with the hire of Oliver Prill as Chief Operating Officer. Oliver is said to have over 15 years experience in the wholesale and retail financial service industry. Before joining Kreditech he served as an advisor to a number of funds and banks operating in the consumer finance space. Previously he was Chief Executive of Optanus, a boutique firm focused on consumer and small enterprise debt resolution in Germany. In 2006, Oliver launched C&A Bank, a fully licensed bank in Germany and served as Chief Executive until 2012. He started his career at McKinsey London where he consulted across the financial services industry. Oliver holds a Bachelor in Economics from London University, a Master in Finance from Cambridge University and a Doctorate in Economics from Oxford University.

“I’m delighted to be supporting Kreditech in its next phase of expansion,” said Oliver Prill. “I look forward to further strengthen operations within the Group. With its unique technology and extraordinary talented team, my aim is to provide the best possible fusion of financial services know-how and best practices.”

The Future of BankingThe Kreditech Group is a young FinTech company that uses big data and complex machine-learning algorithms to serve a simple mission: “Building a ‘digital bank’ for the unscored worldwide.”  The company was launched in 2012 by Sebastian Diemer (CEO) and Alexander Graubner-Müller (CTO) and today has annual revenues in excess of $50 million.  Kreditech secured a $200 million credit facility from Victory Park Capital this past January.  The company has stated it is experiencing a growth rate of 70% to 80% per quarter.

“Oliver’s expertise and operational strength will support Kreditech’s future growth” ,  said Sebastian Diemer “I look forward to work with Oliver as we continue to innovate our product offering in our international markets”

VPC Specialty Lending Adds Positions in OnDeck, Funding Circle & Others

One Pound UK £VPC Speciality Lending Investments (LSE:VSL) has published a brief comment stating they have added investments in several direct lenders including OnDeck Capital, Funding Circle (USA), Upstart Network, Borro and Kreditech.  VPC has also provided a balance sheet loan to Applied Data Finance.  The company acquired these investments from private funds managed by the Company’s investment manager, Victory Park Capital Advisors.  All of these investments total £ 35.5 million. Alongside these new investments, VPC stated it intends to invest “approximately £20 million in an existing investment fund managed by the Investment Manager”.  The investment fund is described as investing in similar finance opportunites. No further details were available.

Following these investments, which are expected to take place in April, the proceeds from VPC’s IPO will be over 28% invested.

A growing number of institutions are investing in peer to peer and balance sheet assets. The direct lending marketplace has become an opportunity to generate better risk adjusted returns in a low interest rate environment. Recent reports have indicated several more funds will be listed in the company months with a similar strategy.

Kreditech Group Secures $200M Credit Facility from Victory Park Capital

The Kreditech Group, a consumer finance technology group, has announced the completion of a $200 million credit facility from Victory Park Capital, a Chicago-based asset management firm focused on middle market debt and equity investments. The investment reflects investors’ confidence in its big data credit-scoring technology and its data platform to serve the estimated 4.0 billion unbanked and underbanked individuals worldwide. This is considered the largest credit facility in fintech outside the US to date.

KreditechThe funding strengthens Kreditech’s position as a leader in the consumer finance technology market. It will use the new financing to continue its rapid growth at 60 to 80% per quarter. With a focus on the geographic rollout and expansion of its product portfolio, Kreditech expects the financing to deliver scale, lower cost and provide flexibility. The Group’s unique technology uses big data gathered from 20,000 data points to feed its proprietary, self-learning, credit-scoring algorithm.

Principal at Victory Park Capital, Gordon Watson stated,“We look forward to helping support the company’s future growth and success in the consumer finance technology space. Kreditech’s credit-scoring model is impressive and has the ability to identify target customers in any market, even underbanked customers in emerging markets.”

Rene GriemensCFO of Kreditech, Rene Griemens noted, “This record transaction is our next step toward becoming the market-leading digital consumer lender. It helps us address the growing demand for loans of longer durations at fair prices. Setting the stage for our upcoming Series C financing round, the credit facility will reaccelerate our growth well beyond the 500 percent per year mark.”

Since its launch in February 2012, Kreditech’s innovative technology has served two million consumers in eight countries. It is one of the fastest-growing companies in consumer finance technology in Europe with a lending run rate of $130 million. In June 2014, the Group closed a USD 40 million equity investment by Värde Partners at a $190 million valuation.

Victory Park CapitalVictory Park Capital is a privately held registered investment advisor dedicated to alternative investing through the management of private investment funds. As specialists in credit and private equity investments, VPC focuses on middle market companies across a diversified range of industries. Whether as a lender or a control investor, VPC seeks to identify opportunities where it believes the potential for reward outweighs the risks entailed. Founded in 2007, VPC is headquartered in Chicago with additional resources in Boston, London, Los Angeles, New York and San Francisco.

Recently, Victory Park Capital announced that it will invest up to £150 million in loans originated by Assetz Capital under a new five year contract. Assetz Capital is a peer-to-peer lending platform that combines traditional loan underwriting with financial technology to efficiently provide capital to small and medium-sized companies in the U.K.

Germany Update: Founder Institute Launches in Frankfurt & Paymentandbanking.com Chooses Kreditech as FinTech Startup of 2014

kreditechPaymentandbanking.com named Hamburg-based Kreditech  as the FinTech Startup of 2014. The jury explains its choice noting  Kreditech “obvious disruption and, unfortunately, one of the few German FinTech startups that has substantial foreign investment.” Kreditech applies big data to score the creditworthiness of customers.

fintechIn addition, Founder Institute initiated its program in Frankfurt.  Founder Institute, which names itself the world’s largest entrepreneur training and startup launch program, opened an office in Frankurt am Main. In the Founder Institute’s four-month, part-time program,  promising startup entrepreneurs “learn by doing”: they launch a company through structured training courses, practical business-building assignments, and expert feedback from a large network of business mentors.

Founded in 20founder institute09 by serial entrepreneur Adeo Ressiand and based in Palo Alto, California with chapters across 85 cities and 40 countries, the Founder Institute states that it has helped launch over 1,310 companies, which have created over 10,000+ new jobs. The company’s mission is to “Globalize Silicon Valley” and build sustainable startup ecosystems that will create one million new jobs worldwide.