CredoLab, a leading developer of bank-grade digital credit scorecards based on smartphone metadata which launched in Kenya, Nigeria, and South Africa, last year, has secured USD 7 million in its Series-A round funding led by GBG, the global specialist in identity data intelligence. In addition to GBG, the round saw participation from Walden International, an existing investor, and Access VC, among other new investors.
CredoLab will focus on consolidating its leadership in Southeast Asia and expanding its market reach in Africa, Latin America, Asia, and key countries across the EU.
According to Peter Barcak, CEO and founder of CredoLab, “As the COVID-19 pandemic abates, we have seen a significant shift from physical originations to digital ones and an increased appetite in using alternative sources of data. CredoLab has continued to provide a stable behavioural score that has kept its predictive power even in the presence of payment holidays when lenders can't rely on credit bureau scores.
“Our offering is positioned to support economic recovery in the markets we operate in by enabling individuals and businesses to start trading again. We have become an essential part of the recovery strategies of our clients as they restart lending in the post-COVID-19 environment in a risk-controlled way,” says Barcak.
Chris Clark, chief executive of GBG, says, “GBG’s fraud and compliance solution allows financial institutions to on-board and transact with their customers quickly, safely, and securely. CredoLab’s AI-based proprietary technology will complement our existing offering and also provide critical behavioural risk reference data from good customers that are financially excluded.”
Barcak adds that, “Last year we had some great names come on board in Nigeria and South Africa as well as in Brazil, India and Europe. In the next 12 months, with more resources at hand, we intend to expand our network and further target non-banking financial institutions.
“With the objective of democratising credit scoring, CredoLab plans to use this investment to further enhance its product features and expand the understanding of customers’ digital risk DNA and push the adoption of its solutions in other industries at the intersection with financial services and help them grow faster, post-pandemic.”
CredoLab develops bank-grade digital scorecards for companies that need to make better credit decisions including banks, lenders, e-commerce, travel, ride-hailing, e-wallets, insurance, and retail companies. It uses the best source of privacy-consented, and permissioned data (smartphone and web metadata) to help clients to expand their market share and decrease their cost of risk in real-time.
The fintech’s strategic focus is on helping financial institutions and other lenders credit score more people, especially those with thin or limited credit histories, to bring more people into the mainstream economy. Too many people are invisible to lenders because of a lack of data for risk assessment. Since its inception in 2016, CredoLab has powered almost USD 2 billion in loans issued by 70+ clients across 20+ countries.
Privacy and regulation underpin CredoLab’s business - Credolab scores responsibly and in compliance with local data privacy regulations, including the EU's General Data Protection Regulation 2016/679. Metadata is not sourced from a person’s social media network or personally identifiable information (PII), but from messages, contacts, calendars, downloads, history, emails, and storage. Examples of metadata include the percentage of new contacts added vs old ones and the number of videos in the storage. With scores being issued within 3 seconds, this is the fastest and most accurate method of creating a bank-grade digital scorecard.