How Kreditech Leverages Big Data to Revolutionize Credit Scoring
In today’s digital economy, consumers generate vast amounts of online data—a goldmine for fintech innovators. Kreditech, a Hamburg-based fintech startup, has developed a cutting-edge ‘Scoring as a Service’ platform that analyzes over 8,000 real-time data points to assess creditworthiness. The company recently secured $4 million in additional funding from Blumberg Capital, an unnamed German investment bank, and existing investor Point Nine Capital.
The Investors Behind Kreditech’s Growth
The funding round builds on earlier investments from prominent European tech figures including:
- Michael Brehm (ex-studivz)
- Heiko Hubertz (Bigpoint founder)
- Felix Haas (amiando founder)
- Stefan Glaenzer
- Several venture firms including Greycorp and YoungBrains
How Kreditech’s Technology Works
Kreditech’s proprietary algorithm processes diverse data streams to generate credit scores, including:
- Location intelligence: GPS and micro-geographical data
- Social signals: Likes, friends, posts, and network connections
- Digital behavior: Website interactions and session duration
- E-commerce patterns: Shopping history and preferences
- Device insights: Installed apps and operating systems
“Our system evaluates thousands of data points in real-time for each scoring unit,” explains Alexander Graubner-Müller, Kreditech’s CTO and co-founder.
Dual Strategy: B2C Micro-Loans Fuel B2B Innovation
The new capital will primarily support two initiatives:
- Expanding micro-loan operations in Poland and other European markets
- Launching international B2B services in early 2013 for banks, leasing companies, and e-commerce platforms
Interestingly, Kreditech’s B2C micro-loans serve a dual purpose—they not only generate revenue but also refine the company’s core scoring technology. “Our microloans provide valuable repayment data that enhances our B2B scoring models,” notes Graubner-Müller.
The Big Data Credit Scoring Landscape
While Kreditech pioneers this approach in continental Europe, they’re not alone in harnessing alternative data for credit assessment. UK-based Wonga similarly utilizes non-traditional data points, though most companies guard their specific methodologies closely.
This emerging sector highlights how digital footprints—from social media activity to browsing behavior—are becoming increasingly valuable in financial decision-making. Kreditech’s latest funding round validates both their technology and the growing market for data-driven credit solutions.
What’s Next for Kreditech
The company plans to make its B2B platform easily accessible, requiring “minimal technical setup” with flexible contract terms. As big data continues transforming financial services, Kreditech’s hybrid model positions it at the forefront of Europe’s fintech innovation wave.
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