Naspers’ PayU invests in fintech firm

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 12month programme in Poland, stated PayU.

PayU is the fintech arm of South African investor Naspers, which bought Citrus Pay in India. It plans to use this partnership to develop its credit portfolio in India. 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 PayU 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 inno- vative credit services to underbanked mar- kets around the world, the two stated.

Kreditech will expand its Lending as a Service (LaaS) offer- ing and deliver its Artificial Intelligence (AI) and machine- learning credit underwriting and loan management technology to PayU’s 300,000strong 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 realtime online process. The pilot programme issued a little more than ^10 mn in credit. Through this growth financing, PayU 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. PayU has a strong record in building payments businesses in growth markets, such as Eastern Europe, India and Latin America.

This partnership now makes PayU one of the biggest fintech corporate venture investors, having invested $265 million over the past 12 months, with positions in highgrowth 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.

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