Hamburg-based Kreditech secures $200M credit facility from Victory Park Capital

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The Kreditech Group, a fast growing consumer finance tech startup, announced today the completion of a $200 million credit facility from Victory Park Capital, an asset management firm focused on middle market debt and equity investments based in the United States. The investment reflects investors’ confidence in its big data credit-scoring technology and its big data platform. It is the largest credit facility in B2C fintech outside the US to date.

The funding strengthens Kreditech’s leading position in the consumer finance technology market. The Hamburg-based startup 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.

“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,” said Rene Griemens, chief financial officer of Kreditech. “Setting the stage for our upcoming Series C financing round, the credit facility will reaccelerate our growth well beyond the 500% per year mark.”

Since its launch in February 2012, Kreditech’s innovative technology has served two million consumers in nine 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 $40 million equity investment by Värde Partners at a $190 million valuation. Other institutional investors include Blumberg Capital, HPE Growth Capital and Point Nine Capital.

The Kreditech Group uses big data and complex machine-learning algorithms to serve a simple mission: “Building a ‘digital bank’ for the unscored worldwide.” The Kreditech Group is split into two parts: “Kredi” stands for the subsidiaries operating as financial service providers that issue credit to private individuals. The second part, “tech” is the Hamburg-based tech company – Kreditech Holding – developing banking technology and providing supporting services. Based on 20,000 data points, its proprietary technology allows financial service providers to acquire, identify, score, pay out and upsell customers within seconds. Automated processes combined with self-learning algorithms ensure fast and convenient customer service while minimizing costs and space for human error.