Dec 20, 2016 · 25m · top-founders
EP 514: $120M Raised, Helping 1m Consumers Get $100m+ In Credit Who Have No Other Choice with KreditTech CEO Alexander Graubner-Muller
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The Top Entrepreneurs, host Nathan Latka interviews Kreditech CEO Alexander Graubner-Müller about how the fintech startup utilizes proprietary machine learning underwriting and $120 million in equity funding to build a high-growth balance-sheet lending business for underbanked consumers worldwide.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 35.6% of the talking time here. How this is scored →
Nathan as informed peer 4.6 Guest teaching 3.8 Guest disagreement 2.3 Nathan pushing back 4.0
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 16:45 Refusing to disclose internal liquidity targets
Alexander explicitly draws a boundary, stating that cash-to-loan ratios are numbers they do not share despite Nathan's direct probing.
Hardest push from Nathan ▶ 16:35 Demanding cash reserve standardsNathan refuses to accept Alexander's non-regulated status deflection, insisting on knowing what cash buffer management actually aims to hold.
Biggest teaching moment ▶ 3:05 Correcting the credit scoring premiseAlexander corrects Nathan's question about score deviation, explaining that their entire business model is creating credit for people completely ignored by credit bureaus rather than marginally outscoring banks.
Nathan holds their own ▶ 10:55 Interrogating the 30% monthly rateNathan catches the staggering pricing figure, interrupting Alexander to confirm whether he said thirteen percent or thirty percent for a single month.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Introducing Alexander Graubner-Müller of Kreditech | 4 | 6 | 2 | 2 | Latka asks how much Kreditech's credit scores deviate from standard bank underwriting. Graubner-Müller educates him by reframing the premise, explaining that they do not just improve existing scores but create credit access for people completely excluded by traditional credit bureaus. | |
| Consumer Focus, Loan Purposes, and Lending Risk | 5 | 4 | 1 | 3 | Nathan inquires about loan targets and the balance sheet size. Alexander explains their short 10-month maturity cycle and how their $60M active book turns over rapidly. | |
| Scaling Milestones, Industry Benchmarks, and Revenue Figures | 5 | 3 | 1 | 4 | Nathan pushes the guest past vague growth terms by asking if they are doubling year over year, and translates total loan origination volume directly into top-line company revenue. | |
| Risk-Based Pricing and the Interest Rate Spectrum | 5 | 5 | 2 | 5 | When Alexander mentions high short-term interest rates, Nathan immediately stops him to clarify if he said 13% or 30% for a single month, prompting an explanation of risk-based APR tiers. | |
| Managing Default Risk and Credit Upgrade Pathways | 5 | 4 | 3 | 5 | Nathan presses Alexander on the internal default rate assumptions used in board meetings. Alexander deflects specific figures but shares low double-digit estimates and explains customer credit progression paths. | |
| Financial Inclusion and Sustainable Business Economics | 4 | 4 | 2 | 2 | Nathan cites funding research and Alexander clarifies their equity ($120M) versus debt lines ($30M), explaining their loan securitization structure with institutional investors. | |
| Liquidity Strategy and Balance Sheet Management | 6 | 3 | 6 | 7 | Nathan repeatedly grills Alexander on his preferred cash-on-hand ratio relative to loan origination volume. Alexander refuses to disclose internal liquidity metrics, leading Nathan to challenge whether the metric even matters to management. | |
| Mid-Roll Promotions: TheTopInbox and HostGator | 3 | 1 | 1 | 4 | During the rapid-fire round, Nathan pushes back when Alexander provides a retrospective philosophy rather than a new operational insight for his 20-year-old self. |
Statements from this episode (17)
Kreditech Uses Alternative Data and Machine Learning for Underwriting
“We have developed our own technology for doing the credit rating. And that technology very heavily uses alternative data and machine learning to build a credit rating also in the absence of credit bureau data.”
Kreditech Scores Underbanked Borrowers Excluded by Traditional Banks
“With our technology, we are for the first time ever actually able to provide a credit rating For those customers and actually enabling to do credit business with them.”
Kreditech's Core Product Is Unrestricted, Unsecured Consumer Loans
“The average credit product that we offer is, is an unsecured loan, so we are not really interested, I mean, for which purpose, I mean, it is used.”
Kreditech Takes Direct Credit Risk and Monetizes via Interest
“No, we're actually a lending company, so it means we like to I mean, take credit risk ourselves, and I mean, the way how we make make money is, I mean, the same way how every bank does money by charging an interest on the loans that we are that we are originat…”
Kreditech Originated Over 1 Million Loans With $60M Outstanding Book
“Since the start of the company in 2012, we have originated a bit more than a million loans by now, and we have a total outstanding book of around sixty million at this point.”
Kreditech Consumer Loans Average Around 10 Months in Duration
“Most of our loans are, comparably short in maturity, so the average duration is around 10 months.”
Kreditech Originated Over $100 Million in Loans in 2015
“Last year when we, for the first time, actually broke the hundred million origination for the entire year, 2015, I mean, that was clearly, I mean, a very, very important milestone for us.”
Kreditech Generated Over $40 Million in Revenue in 2015
“We made last year around 40, a bit more than forty million in revenue.”
Kreditech's Highest-Risk One-Month Loans Carry 30% Interest
“So, so on, on the upper end of the spectrum sort of like the loans that we underwrite are maximum like one month loans and those cost around 30% cost of credit.”
Kreditech Offers Installment Loans With Rates as Low as 12%
“And then we go all the way down to our basically personal personal installment loan segment where we go as low as 12% per year.”
Half of Unvetted Loan Applicants Would Default, Graubner-Müller Claims
“If you would give a hundred percent of people who apply for a loan a loan, I mean, about half of those people would not repay.”
Kreditech Assumes Low Double-Digit Default Rates on Loan Originations
“That's information that we usually don't share, but I mean, it's in the, I see it's in the low low double digits.”
CEO Argues the Highest Cost of Credit Is Having No Access
“We think actually the highest cost of credit is actually not having any access to credit because Even, I mean, even, I mean, for some people, even if initially there's only, I mean, that type of credit option available, I mean, it's still, I mean, a significan…”
Kreditech Has Raised $120 Million in Equity Capital
“We have raised around a hundred twenty million in equity capital to date.”