Kreditech — the online lender that builds credit histories based on big data analytics and is backed by the likes of Peter Thiel, Blumberg and the World Bank’s IFC — is today announcing a new strategic investor, and with it, a little more funding. The Hamburg startup has raised $10.4 million (10 million euros) from Rakuten, the e-commerce giant out of Japan. The investment comes out of Rakuten’s fintech startup fund, launched last year. This is one of the biggest investments out of it to-date and the first to be made in Germany.
Kreditech is not disclosing the size of its valuation but from what I understand, it’s continuing to rise and is currently around 300 million euros ($313 million).
The size of this new capital injection is relatively small for a company whose last round, earlier this year, was closed out at $105 million; and comes as it is planning to raise thereabouts again in the very near future. But what it does give the company is a new strategic partner to help build out its business.
Specifically, this will happen on two levels.
As Kreditech’s CFO Rene Griemens explained to me, Rakuten has a banking license in Luxembourg, and it would like to expand the purchasing options that it gives to customers in the region. Today, Rakuten operates PriceMinister in France and Rakuten.de in Germany, and it would like to give customers who are buying larger items the option to do so on credit.
“Rakuten’s vision for global innovation is about contributing to society through cutting edge technology and entrepreneurship. We are excited about Kreditech because of its unique model of individual empowerment through access to credit across various international markets,” said Oskar Mielczarek de la Miel, Managing Partner of the Rakuten FinTech Fund, in a statement. “Kreditech is already widely recognized for its distinctive big-data-driven credit model and tech expertise. Rakuten’s investment will allow them to further expand their unique offering.”
This builds on one of Kreditech’s offerings today, a point-of-sale loan service, and the idea will be to integrate that to help close more purchases of these bigger-ticket goods. (Kreditech already offers a service like this with Naspers’ PayU in Poland.)
Beyond those two e-commerce marketplaces, Rakuten has also quietly been building a bank — which is one reason why it launched a dedicated fund to back fintech startups, to scout out new partnerships and services — and it could theoretically also integrate Kreditech’s loan services into that wider platform, which works with online merchants to enable payments for goods — as another feature to offer its customers.
Outside of Europe, Griemens tells me that Kreditech has its sights on expanding into Asia, specifically into the emerging markets, following its strategy up to now. Today, it doesn’t have a presence in Asia, and it believes that this new relationship with Rakuten could help with that.
“Rakuten invests directly into our mission to improve financial freedom for the underbanked through technology”, said Alexander Graubner-Müller, Founder and CEO of Kreditech, in a statement. “In addition to the financial investment, we envision future partnership opportunities. With its strong market position in Asia, Rakuten could be a door opener for us,” Kreditech’s CFO, Rene Griemens, added.
Rakuten has made several other investments through its tech fund that could be seen both as an endorsement of fast-growing areas, but also where Rakuten may like to take more involvement itself in the future. They include money-transfer startup Azimo; $12 million Series B round for Latin America-based Uber rival Cabify; a Series C for UK-based Currency Cloud; and bitcoin enabler Bitnet — which Rakuten eventually acquired.
To date, Kreditech has raised around 152 million euros in equity financing.