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PayU Investment in Kreditech Marks Largest Funding for a German Fintech

In a funding round led by online payment service provider, PayU, Germany’s Kreditech has raised $120 million (€110 million). The investment is the largest equity investment in a German fintech company to date. Kreditech CEO Alexander Graubner-Müller said his company was looking forward to bringing “point-of-sale finance” to markets where “reliable credit risk assessment” is lacking. Graubner-Müller added “Teaming up with PayU provides underbanked customers new possibilities and supports our mission of providing financial freedom through technology.”

In addition the record-setting nature of the funding, the partnership between Kreditech and PayU also represents what the company called in a press release: “the first such strategic cooperation pact between a payment service provider and a technology driven consumer finance company.” Pointing to its commitment to bring credit and financial services to the underbanked, PayU CEO Laurent le Moal said his company’s “substantial investment” in Kreditech will “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.”

Pictured (left to right): Co-founders Sebastian Diemer and Alexander Graubner-Müller demonstrating Kreditech’s platform at FinovateSpring 2014.

This week’s funding adds to the $10.4 million Kreditech raised in a round led by Japan-based Rakuten last December. With total capital of more than $280 million, the Hamburg-based online lender has earned a valuation of between $325 million and $540 million, according to an estimate in TechCrunch.

Kreditech has processed more than four million loan applications via its subsidiaries, leveraging its API-driven, lending-as-a-service approach to make it easy for partners to integrate and custom-fit a variety of consumer finance solutions. These include loan application and credit risk management products, e-signature and customer service, loan refinancing, processing, and collections. The company is active in more than five markets around the world – including Russia, Mexico, Spain, and Poland, where Kreditech and PayU recently completed an $11 million (€10 million), 12-month pilot program.

Founded in 2012 and headquartered in Hamburg, Germany, Kreditech demonstrated its technology at FinovateSpring 2014. Named to H2 Ventures and KPMG’s Fintech 100 in 2016, the company added a pair of new board members last month: former Vanquis Bank CEO Michael Lenora and OneSavings Bank CEO Andy Golding.