French startup United Credit has raised $ 170 million in funding. Goldman Sachs is also participating in the Eurozone, BPFerence, and AG2 to La Mondial with existing investors. The company provides a variety of credit products to European customers. It also has various distribution strategies. Consumer credit in Europe is completely different from consumer credit in the United States. Many countries do not rely on a central credit score system to verify your creditworthiness. Similarly, most people do not have a credit card.
Financial institutions that want to offer a credit line have to evaluate the potential risk behind a credit application. This can be a complicated and tedious process. Young Credit distinguishes itself from legacy players with data-driven, AI-based approaches. Instead of sending a ton of documents to your banker, United Credit tries to automate the request process as much as possible.
The company takes advantage of the DSP2 Regulation and the Open-Banking API to compile data. Since the huge amount of credit has been made easier in the beginning, it can also gain past data for machine-learning risky models. To date, United Credit has provided more than €2.4 billion in credit ($2.8 billion at today’s exchange rate). It operates in five European countries. France still represents 40% of United Credit earnings as Italy, Spain, Portugal and Germany as the company’s top markets.
Most recently, the company began embedding its product in third-party products. For example, banks and fintech companies provide credit products in their apps for partnerships with United Credit. Examples include N26, Lydia, Orange Bank and Fortune. In 2021, the B2B offer represents 30% of United Credit’s net banking revenue. Right now, United Credit has 440 employees. It plans to hire 200 more in the next 18 months. The company wants to double in European markets.
Next, Young Credit wants to double down on embed finances with credit products appearing on the checkout pages of popular e-commerce websites and applications. The company will compete with “Buy Now, Pay Later” companies like Clarna, Floa, Wani, Scalpe, etc. Depending on the young paycheck, the company plans to offer a wide range of options, including terms spread over 3 to 48 months. Some companies are already using United Salary, such as Free, Micromania and LDLC.