German fintech startup Kreditech raises €110 million to expand credit in emerging markets

German fintech startup Kreditech has received an investment of €110 million from the payment services provider PayU, which is owned by the Internet and media group Naspers. This investment brings the total raised by the company to €242 million. The valuation of the company has not been disclosed, but it is estimated to be between €300-€500 million.

Kreditech helps to create credit ratings, and provides credit to people who have little or no credit history, the "underbanked". The company says its services are especially important in emerging markets where credit card use is rare, and people don't have the opportunity to build credit. Kreditech and PayU have previously worked together, for instance in Poland where Kreditech has already extended €10 million in credit to users.

Founded in 2012 and headquartered in Hamburg, Germany, Kreditech is active in more than five markets worldwide, including Russia, Mexico, Spain and Poland. The financing will help the company to expand into new markets in Eastern Europe, India, and Latin America.

“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," explained Alexander Graubner-Müller, CEO of Kreditech, in a statement. "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.”

“We are excited to build a leading innovative online consumer lending player in high growth markets," added Laurent le Moal, CEO at PayU. "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.”

Read more: Bob's Guide (Press release)