Rakuten, Inc., a Japanese e-Commerce firm has made a 10 million euro investment in Kreditech, a German financial technology startup that runs huge data technology to assess the creditworthiness of potential debtors with small or no traditional credit record. Kreditech assert that it will use the investment from Rakuten’s FinTech fund to broaden its industry that partners with other firms to provide lending assistance. Rene Griemens, Kreditech’s chief financial officer said “details of the works, is in the conversations with banks interested in offering digital personal loan products to their consumer base, but lack technical capabilities to do so”.
The firm is also estimating potential collaboration opportunities with Rakuten. Kreditech is already evaluating potential strategic cooperation in many areas, including payments, financing and potentially, at a later stage point of sale financing, Griemens added. The investment brings Kreditech’s total equity funding raised since launch to 135 million euros. PayPal co-founder Peter Thiel and venture capital firms Amadeus Capital Partners, Värde Partners, HPE Growth Capital and Blumberg Capital, are also benefactors. It is the most recent stake by Rakuten’s fund dedicated to the rising financial technology sector, launched last year to sustain innovations in financial services. Rakuten’s financial divisions contain online banking, credit cards, insurance, securities and asset management in Japan and worldwide. Kreditech offers consumer credit products such as micro-loans and prepaid credit cards. It has processed nearly 3 million loan applications since release, and has granted 1 million loans so far. To verify the quality of the company, Kreditech’s technology operates up to 20,000 data points for each operation, taking roughly 32 seconds per uses. The company said its profits were 43.7 million euros up 107 percent from last year.