Dec 15 Japanese e-commerce company Rakuten has
made a 10 million euro ($10.4 million) investment in Kreditech,
a German financial technology startup that uses big data
technology to assess the creditworthiness of potential borrowers
with little or no conventional credit history.
The Hamburg-based company said on Thursday that it will use
the investment from Rakuten's FinTech Fund to expand its
business that partners with other companies to provide lending
As part of these efforts, it is in discussions with banks
interested in offering digital personal loan products to their
customer base, but "lack technical capabilities to do so," said
Rene Griemens, Kreditech's chief financial officer.
The company is also assessing potential collaboration
opportunities with Rakuten.
"We are already evaluating potential strategic cooperation
in many areas, including payments, financing and potentially, at
a later stage point of sale financing," Griemens said.
The investment brings Kreditech's total equity funding
raised since launch to 135 million euros ($140.78 million). In
September 2015, it raised 82.5 million euros ($86.03 million) in
a round led by private equity firm J.C. Flowers.
Other backers include PayPal co-founder Peter Thiel and
venture capital firms Amadeus Capital Partners, Värde Partners,
HPE Growth Capital and Blumberg Capital.
It is the latest investment by Rakuten's fund dedicated to
the emerging financial technology sector, launched in 2015 to
keep up with innovations in financial services. The Japanese
company's financial divisions include online banking, credit
cards, insurance, securities and asset management in Japan and
internationally. In May, it backed London-based money transfer
Founded in 2012, Kreditech offers consumer credit products
such as micro-loans and prepaid credit cards. It has processed
nearly 3 million loan applications since launch, and has granted
1 million loans so far.
It is among online companies that automate the processing of
large swathes of data to make lending decisions in minutes or
To determine creditworthiness, Kreditech's technology
processes up to 20,000 data points for each application, taking
roughly 32 seconds per application. The company said its
revenues were 43.7 million euros ($45.57 million) in 2015, up
107 percent from the previous year.
($1 = 0.9590 euros)
(Reporting by Anna Irrera; Editing by Nick Zieminski)