Explicitly or implicitly, users are generating an insurmountable amount of data online, hence the plethora of startups touting their BIG DATA credentials by building applications or services that create utility out of these mass data points. Kreditech, which describes itself as a ‘Scoring as a Service’, is one such startup, with technology that claims to process over 8,000 data points in real-time — made up of things like location data, social graph data, web analytics, e-commerce behavior, and device data — to give consumes a credit score which it then sells on to retailers. Today, the Hamburg-headquartered company has announced that it’s raised a further $4 million in funding from Blumberg Capital, the management of an unnamed German investment bank, and previous backer Point Nine Capital.
Michael Brehm (ex-studivz), Heiko Hubertz (founder Bigpoint), Felix Haas (founder amiando), Stefan Glaenzer, Greycorp, YoungBrains, Digital PioneersN.V., and H2 Investments are also said to have invested in the startup earlier this year. Meanwhile the injection of capital will be used to scale its B2C ‘micro loans’ offering, which harnesses the same core tech as its credit scoring service, in Poland and to launch in other European countries.
Kreditech, of course, isn’t the only company using so-called BIG DATA culled from the consumer Internet as part of its credit checking secret sauce. The UK’s Wonga, another micro-loan (or payday loans) startup is thought to also factor in similar data points — although no company in this space gives away too much detail on what and how they make sense of the BIG DATA soup. But the fact that credit scores appear to be one such application says a lot about the sheer scope of data we consumers leave littered across the Web and elsewhere online.
To that end, in its press material, Kreditech does give a few examples of the data points its ‘Scoring as a Service’ harnesses:
Location data (GPS, micro-geographical), social graph (likes, friends, locations, posts), behavioral analytics (movement and duration on the webpage), people’s e-commerce shopping behavior and device data (apps installed, operating systems) are just some examples of up to 8,000 data points that are processed in real-time for any single scoring unit.
Another potentially clever part of Kreditech’s BIG DATA play is the way its B2C micro-loans offering seems to be, in part, a ploy to validate and feed into the tech powering its B2B credit scoring service. “We gather important learning about repayment behavior and validate our data by issuing B2C microloans in different countries and then transfer the technology to our B2B products”, says Alexander Graubner-Müller, CTO and co-founder of Kreditech, in a canned statement.
Few specifics are given about said B2B offering, except that it will launch internationally early next year and allow retailers (e.g. banks, leasing companies, e-commerce stores) to access parts or all of Kreditech’s data with “minimal technical setup and no contracts or minimum durations”.