Online payment services firm PayU invested €110m ($120m) in Germany-based online consumer lending platform Kreditech yesterday as part of a strategic partnership deal.
Kreditech has built an online platform that incorporates consumer lending, a digital wallet and a personal finance manager, using machine learning and non-traditional data sources to select borrowers.
The company’s subsidiaries have processed more than 4 million loan applications across its home country as well as Russia, Mexico, Spain and Poland.
PayU plans to form a point of sale finance service in partnership with Kreditech that will involve the latter bringing its artificial intelligence (AI)-based credit underwriting and loan management capabilities to about 300,000 merchants in PayU’s network.
Laurent le Moal, PayU’s CEO, said: “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. In the past 12 months, we have become the leading corporate venture capital investor in fintech, investing more than €245m around the world. This latest investment in Kreditech fits perfectly with this vision.”
The investment was made at a higher valuation than the reported €300m valuation at which e-commerce and fintech firm Rakuten invested $10.5m in Kreitech’s in December 2016, according to TechCrunch, though it remains below €500m.
Kreditech has now raised just over $280m from investors including International Finance Corporation, Amadeus Capital Partners, Värde Partners, HPE Growth Capital, Blumberg Capital, Global Founders Capital, Point Nine Capital and private investor Peter Thiel since it was founded in 2012.