One-year-old fintech startup Finiata raises €18 million. The existing and new international investors are also strategic partners for the upcoming European market penetration. The Berlin-based startup is on its way to becoming the leading finance platform for SMEs, freelancers, and self-employed persons. It already has 5,000 customers as a result of a credit scoring system that mixes manual processes, traditional scoring algorithms and alternative data sources. Finiata was founded by Sebastian Diemer who also founded Kreditech.
Besides the Who’s Who of the European venture capital scene (DN Capital, Point Nine Capital, Redalpine, Fly Ventures, LaFamiglia), ENERN, the largest Czech VC, and Kulczyk Investments, founded by late billionaire Jan Kulczyk, are now on board as strong strategic partners of Berlin-based fintech startup Finiata. This €18 million investment round is one of the largest for such a young fintech company. €10 million have been invested as a Series A by the new Eastern European investors and current investors like DN Capital, Point Nine, Fly Ventures and Redalpine who have increased their investments according to their respective shares. An additional €8 million has been raised in the form of debt financing for the existing portfolio.
Finiata’s team is made up of 50 people. “More than 50 percent of the team consists of programmers, data scientists and other experts that work on the algorithm,” says Kenan Deniz, co-founder and CTO. In the past four months, Finiata had an average monthly growth of 35 percent – a number that is increasing.
Unlike other factoring providers, Finiata focuses on the “little ones” – freelancers, self-employed persons and SMEs – without setting out minimum requirements such as annual turnover and lifespan. Banks and other financial service providers cannot serve this customer segment in a conventional manner and have neglected it accordingly.
“Even new providers focus on larger companies that are just below the acceptance threshold of known banks. We, on the other hand, focus on customers that are actually small and that can only be serviced through the automation and setup of an independent risk system. Schufa, Crefo etc. also do not come into play since no bank has ever given a credit in this segment. Finiata is basically the Kreditech playbook for a much larger market segment with less regulations and a higher customer benefit”, explains Finiata founder Sebastian Diemer. “Besides the opportunity of servicing a previously uncovered customer segment, our automation further has the benefit that we can provide a financing framework for all customers. This framework tells them exactly how many invoices they can get pre-financed through us. It also pre-defines the maximum invoice amount,” he continues. This happens independently of the actual term of payment of the invoice. The customers can freely choose a period of 30 to 90 days.
“Partners with a first-class network of banks, distribution and regulation on board”
“Our new investors are very helpful for our vision because they strategically and operatively provide us with competitive advantages in our target markets that go beyond the usual added value of VCs”, says Sebastian Diemer. “Having Kulczyk Investments and ENERN on board means we have partners that give us access to a first-class network of banks, distribution and regulation in our target markets,” he further explains.
“Finiata is a project with a global potential. The distinctive feature of the company is its strong position on the Polish market and a very good management team. I believe that our experience and international network of business contacts will help Finiata in its global expansion,” says Sebastian Kulczyk, CEO Kulczyk Investments.
Pavel Mucha from ENERN states: “Sebastian Diemer and his team got a groundbreaking innovation going in SME financing and are rapidly establishing themselves in the German and Polish markets. Many SMEs are hostages of old-fashioned, manual banking processes that often threaten their very existence. We are excited to join and help Finiata in building the risk management capabilities and expanding across Europe.”