Younited Credit is creating the world's largest crowdfunding platform inside continental Europe. The French startup has raised about $47.8 million. The money will be used to launch their products in a number of new countries. The cash will enable the company to work on a number of new product features as well. The operations of the company are presently live in Italy, France, and Spain. The product is consumer facing. Consumers can borrow any amount from a minimum of $1,200 to about $48,000 without interacting with any actual bank. It is observed that about 40 percent of borrowers go for any small amount ranging from $1,200 to $3,600.
A large team of data scientists forms the core of the company. About 60 data scientists are employed in Younited Credit to ensure that the product offered is an optimized one. To give an example, the company uses linear regression algorithm for its proprietary credit scoring system. This is important as France has no central system of credit rating. Engineers are now increasingly using a number of machine learning methods to train the standard credit scoring algorithm. The company implements an AI-powered model so that the creditworthiness can be determined.
On the converse side, other users could lend money, and also companies, insurance companies, and pension funds. It makes an excellent alternative asset if you are trying to build any diversified portfolio. The Younited Credit company has until now managed about $600 million equivalent of loans. From these, about $300 million came into the company during the last 12 months.
The funding round comes from the existing investors like Weber Invertissements, Eurazeo, AG2R La Mondiale, and Credit Mutuel Arkea. The list of other investors includes Zencap Asset Management and Matmut Innovation. Another notable investor is Bpifrance. The latter is pouring money via its own Large Venture fund.
It is to be noted that Younited Credit has a positive contribution margin. This means, if the fixed costs are deducted, the company generates profit on solely the variable costs. It is to be understood that the company is not yet profitable as it continues to invest large sums of money on its team. Money is also being spent on a number of other fixed costs. When it is the matter of consumer-facing products, the company is striving hard to improve the customer's experience. No physical document is needed during the process.