PayU Infuses $119 Mn In German Fintech Startup Kredtitech; Aims To Increase Credit Access In Emerging Markets

Hamburg-based technology group for digital consumer credit Kreditech has secured $119 Mn (Euro 110 Mn) from global online payment service provider PayU. With this move, 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. Additional transaction parameters remain disclosed.

Also, the companies entered into a partnership with an aim to increase access to credit services in high growth, emerging markets including Eastern Europe, India and Latin America. The announcement follows a successful pilot programme managed by Kreditech and PayU, offering Polish consumers improved access to credit in a real-time online process. The pilot programme issued more than $119 Mn ( EUR 10 Mn) in credit.

As per an official statement, Kreditech will expand its Lending-as-a-Service (LaaS) offering and deliver its unique AI and machine-learning credit underwriting and loan management technology to PayU’s 300,000-strong network of merchants. Also, in the past 12 months, PayU has invested more than $266 Mn (EUR 245 Mn) around the world in fintech segment. .

Founded in 2012, Kreditech covers more than five markets worldwide, amongst others Russia, Mexico, Spain and Poland. Kreditech’s Lending-as-a-Service product line is an API-based solution which enables partners to offer tailor-made consumer finance products to their customers. Combining non-traditional data sources and machine learning, the company aims to provide access to better credit and a higher convenience for digital banking services. The product offerings include consumer loans, a digital wallet, and a personal finance manager designed to help customers manage their credit score and plan their spending.

The partnership will also help Kreditech to expand into new territories, cashing upon PayU’s global footprint. Also, the agreement will enable retailers in high-growth, emerging markets to offer their customers new ways of financing online purchases.

“Teaming up with PayU provides the 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,” said Alexander Graubner-Müller, CEO of Kreditech.

Earlier in September 2016, PayU acquired Indian fintech company Citrus Pay for $130 Mn. PayU has over 250 payment methods and PCI (Payment Card Industry)-certified platforms. It claims to have more than 1,800 payment specialists based in local markets supporting PayU’s 300,000+ merchants and consumers making online payments.