Interview: Hamburg-based Kreditech aims to become the “bank of the digital age”

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Hambug-based Kreditech is another hot startup disrupting the tech and banking industry. Founded in 2012, the young company focuses on lending money to “unbanked” consumers with little or no credit rating. Kreditech recently announced a $200 million credit line from Victory Park Capital, one of the largest in the history of online lending services. The firm’s revenues grew 500% in the last 12 months and 60-80% per quarter. We recently had the chance to interview Sebastian Diemer, the CEO of Kreditech.

Sebastian, what is Kreditech?

The Kreditech Group is first of all a technology company that has developed an algorithmic credit scoring model. Using 20.000 data points it is able to predict creditworthiness of everyone worldwide, also the four billion underbanked worldwide who do not have a credit history. Based on this strong technological competitive edge Kreditech is providing a range of credit products in selected markets and will develop over time into a ‘digital bank’, offering a full product suite of own and third party consumer finance products.

In which countries / markets is Kreditech currently operating in?

We are headquartered in Hamburg, but we operate with our nine – soon to be ten – subsidiary companies in Spain, Poland, Russia, Kazakhstan, Czech Republic, Mexico, Peru, Dominican Republic and Australia and provide our services to the end customer through those entities.

What is your vision and where do you see Kreditech in 5 years?

We are going to be the “bank of the digital age” in the near future. Currently working on a financial services platform that will unify all our products, we will soon be able integrate third parties as well.

FinTech is one of the hottest future trends right now. Who are your competitors?

Everyone says that they are unique, but we are. Some competitors have similarities on the first view, e.g. they do lending or scoring. None of them though has a comparably complex technology that not only uses big data but also deploys it within its own subsidiaries.

What FinTech areas do you find most interesting?

p2p lending, personal finance, management tools and crowdfunding.

How to build a global startup? What mistakes have you made?

An outstanding management team and committed employees are key. You have to introduce a clear mission and vision just from the start and build something from scratch, a unicorn against all odds. Making mistakes is part of a strong start-up culture. Everyone makes mistakes along the line, I confirm that I have probably made every single one of them: hired the wrong people, launched fast instead of properly, spent too much money on the wrong marketing campaign… However its exactly the mistakes that in the end shape your business, help making it perfect, making it work and grow on a substantial base.

What is your experience with Hamburg as a location to start a global company? And why didn’t you do it in Berlin?

Hamburg provides a high quality of living, there is plenty of talent from surrounding universities, other big media companies, some tech companies. Also the city provides an ideal infrastructure with a short way to the airport and the train station – within 90 to 120 minutes you can get to all the European banking and fintech hotspots. This and the small but friendly startup scene (while sometimes a bit overly hostile in Berlin) makes it a very enjoyable workplace.

Do you have any tips on how to get funded the right way?

You need a compelling business model, have a strong executive management team and make Investor Relations a top priority of the CFO. Be a good salesman.

Tell us something about yourself. Who is Sebastian Diemer? What is your work style?

Aged 28 I think I have evolved pretty fast, and probably also had to. I will never accept obstacles of any kind but will always find workarounds through combining the smartest team and technology with extremely hard work and endurance.