Kreditech uses Facebook to make faster credit decisions, nabs $7M more

We hear the term big data so often, it’s beginning to lose its meaning. But Kreditech claims to have an actual use for big data that is already making a difference in people’s lives.

Today, Kreditech nabbed $7 million in additional funding from Europe’s largest growth debt provider, Kreos Capital.

Kreditech pulls online data about individuals from a variety of sources. By analyzing a pool of publicly available online information, Kreditech can predict how creditworthy you are in a matter of seconds. The data can also predict whether people are likely to commit fraud, default on a loan, or pay it back on time.

Kreditech is “perceived as one of the more innovative and aggressive startups in Europe,” said Jon Soberg of Blumberg Capital, who made a previous investment in the company. “In international markets, the [founders] are competitive with incumbents [lenders] in terms of products and pricing, but deliver much faster and easier service.”

The big data technology doesn’t require any external credit bureau data. Instead, it relies on Facebook, e-commerce shopping behavior, mobile phone usage, and location data. For this reason, Kreditech has found success with banks, lenders, and retailers in emerging markets, who need a better way to predict whether consumers are trustworthy. Later this year, the company will announce a business-to-business (B2B) expansion.

Currently, Kreditech makes money by issuing online, SMS, and Facebook microloans to consumers. Over time, it’s building a database with country-by-country learnings on how likely consumers are to repay loans.

The company was founded in 2012 and has subsequently expanded its operations in Poland, Spain, The Czech Republic, and Russia. Today, it also announced that it will make a huge marketing push in Mexico and Australia.

Current investors include the Samwer brothers (the German titans of the Internet, best known for making millions through a “clone factory,”) and Silicon Valley based firm Blumberg Capital, among others. It has raised roughly $15 million in capital to date.