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Naspers' PayU invests €110 mn in German fintech firm Kreditech

Deal will help PayU develop its credit portfolio in India and other high-growth markets

Ranju Sarkar  |  New Delhi 

Naspers' PayU invests $110 mn in German fintech firm Kreditech

Germany-based Kreditech, a leading technology group for digital consumer credit using machine learning-based underwriting, has had a €110-million investment from PayU, the global online payment service provider.

This is the largest ever equity investment in a German financial technology (fintech) company and builds on a successful 12-month programme in Poland, stated

is the fintech arm of South African investor Naspers, which bought Citrus Pay in It plans to use this partnership to develop its credit portfolio in In April, it launched LazyPay, an online deferral payment facility to drive faster purchase experience for small-size purchases.

As part of the deal, Kreditech and will partner to deliver a joint proposition for 'point of sale finance'. The agreement combines PayU's strong international footprint with Kreditech's technology to bring innovative credit services to underbanked markets around the world, the two stated.

Kreditech will expand its Lending as a Service (LaaS) offering and deliver its Artificial Intelligence (AI) and machine-learning credit underwriting and loan management technology to PayU's 300,000-strong network of merchants. As mentioned earlier, the announcement follows a successful experiment managed by Kreditech and PayU, offering Polish consumers improved access to credit in a real-time online process. The pilot programme issued a little more than €10 mn in credit.

Through this growth financing, has acquired a significant minority stake in Kreditech. Thus joining existing prominent fintech investors JC Flowers, Varde, Blumberg Capital, HPE, Peter Thiel, Rakuten and the World Bank's IFC.

This strategic investment is part of PayU's global plan to build on its payments heritage to become a leading fintech provider in high growth markets. has a strong record in building payments businesses in growth markets, such as Eastern Europe, and Latin America.

This partnership now makes one of the biggest fintech corporate venture investors, having invested $265 mn over the past 12 months, with positions in high-growth markets to serve global merchants and offer consumer lending services. Kreditech can expand into new territories through its partnership with PayU, meeting its own vision of more financial freedom for the underbanked through technology.

The agreement will enable retailers in high growth, emerging markets to offer new ways of financing online purchases conveniently and at competitive interest rates.

Kreditech's and PayU's non-exclusive partnership is the first such strategic cooperation pact between a payment services provider and a technology driven consumer finance company.

"We are thrilled to offer online point-of-sale finance in markets where the development of consumer credit has been severely constrained by the lack of reliable credit risk assessment. Our credit scoring and underwriting technology allows and its merchant partners to offer a competitive, convenient credit product to their retail customers," said Alexander Graubner-Muller, chief executive officer (CEO) of Kreditech. "We enable retailers to reach a new customer group and significantly increase sales volume."

Laurent le Moal, CEO at PayU, says: "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 $245 mn around the world. This latest investment in Kreditech fits perfectly with this vision."

Kreditech's LaaS product line is an API (Application Program Interface)-based solution for partners to offer tailor-made consumer finance products to customers. Partners gain access to the complete Kreditech consumer lending value chain, including loan application management, credit risk management, know your customer principles (KYC), e-signature, loan refinancing, loan processing and servicing, collections and customer service.

Founded in 2012 and headquartered in Hamburg, Kreditech says it has processed a little more than four million loan applications through its subsidiaries. says it is the leading online payment service provider in 16 high growth markets, dedicated to creating a fast payment process for merchants and buyers. The markets in which it operates represent a potential consumer base of nearly 2.3 billion people, it says.