Monedo, a Germany-based online consumer lending platform backed by digital payment services firm PayU and e-commerce company Rakuten, filed for bankruptcy last week according to Manager Magazin.
Founded in 2012 as Kreditech, Monedo operates a microcredit lending platform that relies on algorithms to determine a consumer’s creditworthiness, making it possible even for applicants with bad credit histories to apply for loans of up to €5,000 ($5,900).
The company reportedly struggled after Spain and Portugal – two of its biggest markets – both passed laws allowing customers to pause loan repayments during the coronavirus pandemic. Its use of non-traditional data sources to assess credit risk meant it was never allowed to operate in its home country of Germany, where such a practice is illegal.
Monedo rebranded from Kreditech in early March this year and had been looking to bolster its market share in India, Poland, Russia and Spain.
Law firm Brinkmann & Partner has been appointed to manage the insolvency proceedings and said it hopes to find an investor to save Monedo, which had previously avoided collapse after multiple individuals in India and Russia defaulted on their loans in 2018, sending its valuation of $230m to almost zero.
The company has collected approximately $302m in equity financing to date. It most recently raised $21.9m in a September 2019 round co-led by Runa Capital and unnamed private investors, with participation from HPE Growth and Amadeus Capital Partners.
PayU supplied $120m in capital for the company at a reported valuation of up to $549m in 2017 as part of a strategic partnership agreement, after Rakuten had injected $10.5m in funding the previous year.
The company’s shareholders also include International Finance Corporation, JC Flowers, Blumberg Capital, Värde Partners, Point Nine Capital, Global Founders Capital and Peter Thiel.
