Kreditech Creates a “Digital Bank for the Underbanked”

Digital banking concept

J.C. Flowers & Co. was one of several companies to invest in the German consumer finance technology company Kreditech to the tune of EUR 82.5 million in Series C financing. J.C. Flowers led the pack in terms of investments, with Peter Thiel and Amadeus Capital Partners contributing earlier this year. Kreditech is a forward-thinking technology company aiming to provide an integrated financial services platform that would become the “digital bank for the underbanked.”

“We are excited to bring these world-class investors on board who will support us in strengthening our integrated financial services platform, bringing us closer to our vision of becoming the ‘digital bank for the underbanked,’” said Kreditech’s co-founder and CEO Sebastian Diemer.

Kreditech moves beyond traditional financial services to offer loan processing to people who normally might not have access to traditional credit bureaus and financial services providers. Loren Felsman of J. C. Flowers, who will be joining Kreditech’s board, noted that the company is moving into areas other financial companies won’t crack for years in an effort to make the loan application process easier.

Kreditech co-founder Alexander Graubner-Muller has always had a fascination with algorithms and statistical data. An avid coder since high school, Graubner-Muller has tried his hand at a variety of algorithm-based companies and products, particularly those that offer investment suggestions based on user-specific data. These skills and interests came in handy when Kreditech began to focus on providing a simpler loan process. “There was not yet a technical solution to make this process fast and efficient,” Graubner-Muller said in an interview with “We realized that this is a huge opportunity to innovate a whole industry and were confident that we can build an algorithmic solution. Our goal was to make a loan application as easy as purchasing something on Amazon, an ‘Amazon for Consumer Finance.’”

Today Kreditech works primarily in Poland, Spain, Mexico, Russia, and the Czech Republic. They plan to launch in Brazil next year. Current loan sizes are between €800 and €1,500 and are set to grow even further from the initial microloans the company started with, which ran from €200-€400.

“We view the addition of J.C. Flowers, Peter Thiel, and Amadeus as a major validation of our business model,” said Kreditech CFO Rene Griemens. “The company has now raised cumulative equity and debt funds of more than EUR 300 million, of which EUR 160 million are unused debt facilities available to finance further growth.”

How to Acquire Customers Quickly


It is no secret that every business needs customers to grow and thrive. However, finding a way to acquire those customers, especially if you need to do so in a short amount of time, can seem impossible. How can your business begin acquiring customers and growing without having to wait?

Make sure early adopters love you, and turn them into evangelists.

In the early stages of your business, it’s much more important to have one thousand users who love you than a million who could go either way on you. If you can get your customers that love you to become brand evangelists, then your business will grow due to word of mouth alone. This is especially effective when coming from the mouths of influencers in a given area of expertise.

Robin Joy of DocuSign writes that the best-case scenario is that your product has a viral loop, where your users naturally expose others to your product. For DocuSign, its viral loop is an organic part of the product, since sending documents to others to sign using DocuSign introduced tens of thousands of new users to their product every single day. DocuSign’s CEO Keith Krach also believes that finding a niche in the market that solves a problem, like DocuSign does by providing timely signatures regardless of location, can allow you to expand rather quickly.

Precisely define your target audience.

You won’t be as effective if you try to market to literally everyone, so it makes more sense to instead target audiences who might be interested in your business’s product or service. In this way, you can specialize your marketing efforts to appeal to these key demographics. Once you’ve done this, try targeting local businesses that serve those same key demographic segments.

Treat referrals like gold.

Referrals cause your business to grow, which can be incredibly important to the long-term sustainability of your business. Therefore, it makes sense to treat your referred customers with an amount of reverence that matches the importance of their contribution to your business’s survival. This might take the form of offering discounts to referred customers and rewards to the referee. It doesn’t hurt to over-deliver sometimes!

Deliver way more value than customers deserve.

If you have the capital to support some great short-term deals, this can be a way to quickly spread the word about your business. Of course, you shouldn’t hide the fact that your special offers won’t last forever!

You can learn more by reading this article from Venture Beat!

Now We Know How Much Caffeine Interferes with Sleep

chemical structure of caffeine

Sleep is complicated. We all know we need it, but many of us don’t get enough. We stay up to late or get p to early, and a lot of people depend on caffeine in order to do either of those things. Well according to a recent study by researchers at the University of Colorado at Boulder, ingesting caffeine close to bed time can mess up your circadian clock, the internal system by which your body determines when it should get ready to sleep and when it should get ready to wake up.

Specifically, they performed a 49 day study with five subjects, some of whom were given caffeine pills (about 200mg) and some of whom were given placebo pills. They were also exposed to bright and low light, to see how that impacted their sleep as well. Unsurprisingly, the people who took the caffeine pills took longer to fall asleep, averaging around 40 minutes slower than normal. When the were also trying to sleep in bright light, that time got to as long as 105 minutes. Bear in mind though, even people who were taking placebo pills had their sleep delayed by up to 85 minutes while exposed to bright light.

So the takeaway from this? Avoid ingesting a lot of caffeine if you want to sleep, and turn the lights off. The study claims that a double espresso three hours before bed can mess you up. But on the plus side, this might help travellers, especially when they have to fly through multiple time zones to reach their destinations. It’s possible that the right amount of caffeine could help people adjust to gaining hours during flights, so they don’t end up going to sleep too early. Of course, we’ll need more studies to figure out how much caffeine that is, or when to take it.

Californians in Fire Risk Areas Turn to Expensive, Specialty Insurance Agencies

forest fire in mountains

Fire insurance for homeowners in California should be a safe assumption. After all, insurance companies exist to help people deal with the unexpected. But ask just about anybody who’s had to actually get their money from an insurance company and they’ll likely tell you that the company did everything they could to avoid paying out. So it’s not a surprise that most of the well known insurance companies, those that usually provide things like homeowner’s insurance, won’t insure homes in areas that are at risk of forest fire. It’s just too expensive.

But people still live in those areas, and despite all of the fires this year, or over the last ten years, many haven’t had to replace their homes, and might never have to do so. That doesn’t mean that fire insurance isn’t a good idea, or that they don’t want it.

Many of those people are turning to specialty insurance companies, or special units within larger companies, to insure their homes. These companies, like Lloyd’s of London or Scottsdale Insurance Company are known for insuring rare or very special things against pretty unexpected problems. They normally insure construction projects or rare art, not homes.

So the resulting policies are there, giving people coverage, but they can get pretty pricy. Those rates are not controlled the way State Farm or some other common insurance company’s rates are, so they can get pretty high for a small amount of property.

There is another option, called California FAIR, which is a consortium of insurers who do provide fire insurance, but they only provide property insurance up to $1.5 million. Which means if you have California FAIR, and you or a loved one are hurt or killed in a forest fire, that’s not covered.

According to the state Senate Insurance Committee, if things keep going in this direction, and regular homeowners keep having to turn to specialty insurers for fire protection, the state may have to step in and try to fix the situation.

Thinking Only Quarter to Quarter Stifles Innovation


IMG: via Shutterstock

For small businesses, thinking only from one quarter to the next is extraordinarily helpful: being able to see changes on the small scale can ensure survival or help correct problems before they become catastrophic.

But for some businesses, thinking in the short-term can be detrimental to innovation and creativity. Successful companies like Google and Amazon have the ability to think ahead—far ahead, in the case of projects like Google’s self-driving car project. Though experimentation won’t work for all companies, it does keep Google and Amazon on the front lines of innovation.

For many small businesses, looking only quarter-to-quarter seems like all that’s possible, but as companies become more successful, they have more room—and more budget—to experiment. However, because shareholders are not forgiving of the trial-and-error process, not every company should experiment with their capabilities, and certainly not before they go public, according to KKR’s Henry Kravis. Even established Wall Street firm KKR, which has begun to branch into venture capitalist investments, understands that experimentation is a delicate process that needs a lot of research and attention.

But larger companies that can afford to experiment with their innovations and company trajectory certainly make some interesting things happen. Google X, the somewhat-secret facility run by the Internet giant, encompasses a lot of projects, some of which are known, some of which are moving into becoming projects, and some of which we may not have even heard of. One of Google’s most innovative projects is its intent to create cars that drive themselves, which has recently moved from an idea stage to actual experimentation involving prototypes.

Like Google, Amazon is also working on some creative projects that could significantly change the way mail is delivered. Amazon Prime Air, so far still in its embryonic stages, is a service that will deliver mail and packages by drone. The project is innovative and would likely be efficient, but it faces the stern countenance of public opinion on the drones, which could be hazardous if not engineered correctly.

There is no guarantee that the program, or Google’s self-driving car initiative, will work: both projects carry the heavy risk of failure, but they are potential failures big companies like these are likely to withstand. Even if shareholders can hold a grudge, they are more willing to take chances on large companies than they are on small ones.

Shareholders of Google and Amazon will probably still see profit even if these ambitious projects tank. But they have a long and sturdy record of measurable progress, so their futures are relatively secure, or at least secure enough that their scopes are not limited to quarter-to-quarter activity.

It’s hard for small businesses who lack the kind of revenue garnered by Google or Amazon to think years into their futures or to tackle ambitious progress where success is not guaranteed. Thinking only from one quarter to the next has its own benefits, of course, but for the larger companies that have the resources, being able to think ahead for the long-term might yield some truly astounding innovations.

Why Are Real Estate Companies Flocking to DocuSign?


If you’re a mover and a shaker in the real estate world, you’re likely aware of DocuSign, the world’s leader in Digital Transaction Management and “unicorn” company. It is certainly true that real estate agencies and firms have begun flocking to DocuSign for their document handling needs, but why is this the case?

DocuSign, led by CEO Keith Krach, has found such high levels of success in part because of their strong leadership, but also because of the extreme convenience, ingenuity, and usefulness of their product—eSignature technology.

The marriage of their line of work and the functionality of DocuSign’s eSignature technology is a match made in heaven. So what’s the relationship between the eSignature technology and real estate agents? First, think about what a real estate agent’s needs might be: the ability to keep track of several documents at a time, to keep to documents very secure, and to be able to have a confidential document be signed and notarized. DocuSign’s eSignature technology provides all of these benefits and more, making it the perfect type of technology for a real estate agent.

So just how successful has DocuSign been? They continue to sign more and more deals with different organizations every day, most recently partnering with SpringCM. Additionally, DocuSign was recently named one of the top 5 hottest late-stage startups from 2014 by Tech.Co.

Riding on a wave of increased growth, DocuSign has also recently announced changes to their Digital Transaction Management and eSignature software, designed to accelerate agent performance. The latest release of Real Estate Plus will include revisions and additional:

  • Tasks lists and templates
  • Tasks overview
  • Dynamic due dates and reminders
  • Dynamic assignment of responsibilities
  • Workflow flexibility
  • Task notification

With these helpful additions to an already popular piece of software for real estate agents, it appears that DocuSign will be proudly serving the real estate industry for many years to come.

Are you a real estate agent who is unfamiliar with DocuSign? Check out this video to learn how your peers are using it!

SpaceX Delays Rocket Missions Later Than Expected Following Explosion


SpaceX has decided to delay their next rocket flight longer than expected. In June they launched a supply mission to the International Space Station (ISS), which exploded in atmosphere after only a couple of minutes. The mission was unmanned so no lives were lost, but a lot of supplies were. While the astronauts and cosmonauts on the ISS didn’t get the supplies they were expecting, they had more than enough to hold them over till a later mission did make it.

The explosion was the result of a faulty strut, which held a helium tank involved in the second stage of the rocket’s flight. When that strut failed the rocket exploded. Since then, SpaceX has decided to test all such struts more carefully than they had. In the meantime, they were supposed to launch a ocean monitoring satellite for NASA, called Jason 3, early this month, but have instead pushed back that launch in order to ensure that their rockets are as safe as possible.

The Falcon 9 rocket that exploded had flown a number of missions without trouble, but that model is actually on its way out, as SpaceX is working on a modified Falcon 9 which is capable of landing at the launch pad, making repeat missions easier and cheaper to execute.

Currently, SpaceX has a backlog of 60 launches, with a total price tag of over $7 billion. Those launches include a number for NASA, as well as private corporations like Luxembourg’s SES SA who, like NASA, haven’t lost faith in SpaceX, despite the accident in June. The Air Force hasn’t lost faith in them either, and has cleared them to bid against United Launch Alliance, a joint operation of Lockheed Martin and Boeing, who until now had something of a monopoly on government launches.

Vintage Technology is Making a Comeback

No, you won’t be seeing any 8-track players or first generation Macs reemerging on the market, but old school technology has hit its retro phase, meaning companies are modeling brand new products after their now defunct predecessors, and consumers young and old get the change to mix a little bit of history with modern day, technological advancement.

This year’s IFA consumer electronic convention is now underway in Berlin, and among the many products on display are those mixing a little bit of old and new. One of the big new items for the fall that hits this niche is the Polaroid Snap Instant Digital Camera, where users can upload their photos to Instagram while simultaneously printing out a copy for their refrigerator.

Unlike its predecessor, this pocket-sized camera doesn’t use ink, but prints through a program called ZINK that uses paper embedded with cyan, yellow and magenta dye crystals that are heat activated, and thus results in high-quality, colored images. Yes, this is more of a novelty item, as many today have no need for printed photos, but those looking to collect images on paper can do so for $99 (whenever the TBD camera date is revealed).

Then there is the Walkman. No one is going to carry around the gargantuan machine that played cassette tapes (and later CDs), but Sony never gave up the trademark and is introducing a new Walkman for the ages. It seems silly to think that people would want to carry both a phone (which plays music) AND a Walkman, but the Walkman NW-ZX100 is perfect for smartphone users who are constantly troubled by their phone’s ever-draining battery. The ZX100 has a 45 hour battery life and 128GB of memory; that’s a lot of music that won’t drain your phone, and it is small enough to fit in a pocket or purse. Its release date is set for this fall.

While both of these items are less vintage and more updated versions of outdated technology, IFA is seeing that media users want a touch of the old-school style that works in the fast-paced world of today. It won’t be shocking if more companies follow Sony’s and Polaroid’s lead and make some throwback products of their own.

Unemployment Rate Falls to 5.1%


The rate of unemployment in the United States fell to 5.1% in August, CNN Money reports. Unemployment was at about 10% at the peak of the Great Recession in the first decade of this century. 173,000 new jobs were added to the economy in August, which is a promising sign that the country and economy are moving in the right direction—but the number is not what was expected.

The economy was expected to generate closer to 220,000 new jobs last month, though August is “typically the quirkiest of the year,” says CNBC, and Wall Street economists have been wrong about their August expectations no fewer than 21 times in almost 30 years. The project jobs output for August was around 203,000, and though the numbers themselves are smaller than anticipated, many of the jobs that were added are high-income ones. 56,000 jobs were added in health care; 19,000 to financial services; and 33,000 to the professional services industry.

But the bag is still mixed. Despite the introduction of new jobs and the fall of the unemployment rate, the economy isn’t growing as expected. 1.7 million jobs have been added in total for this year, but last year at this time that number was 1.9 million. So why is the rate of growth so slow? Well, there’s really no clear cut answer to that question, according to financial experts. Chief investment strategist at private bank Brown Brothers Harriman Scott Clemens is neither bothered nor excited by August’s numbers. “It’s the same old, same old,” he says. “This just continues the trend that we’ve seen where all the sectors of employment continue to improve modestly.”

However, though there were fewer jobs created in August than expected, the economy is growing—even if slowly. “the mixed report did little to alter views that the U.S. economy remains vibrant despite volatile global financial markets and slowing Chinese growth,” Reuters reported, though it remains to be seen whether the Federal Reserve will raise interest rates at its meeting later this month.

H&M Sets Up Prize for Clothing Recycling Techniques

Clothes Recycling

H&M is known for producing cheap clothing of reasonable quality, part of the so-called “fast fashion” industry. Clothes like this are the kind that appear in Internet ads or are discussed on morning talk shows with rock bottom prices. And yes, most of these companies use incredibly low-paid employees and are seemingly unconcerned with the safety of those employees.

But H&M, at least, is trying to improve their ethics credentials, probably save themselves some money, and help the environment at the same time. Currently, their working on their first line of jeans containing recycled cotton, which go on sale soon. Cotton is notoriously hard to recycle, especially when blended with other materials, and so most clothing ends up in the dump. Certainly some people donate their old clothes, but most of it ends up in the trash.

The problem is that cotton is water and, currently, pesticide intensive, so growing it isn’t exactly great for the environment. Finding ways to recycle it is important, not only to the environment, but also to the profit lines of fashion companies. If they could find ways to efficiently recycle cotton and other fabrics, they might be able to cut down production costs even more. Maybe then they could turn some of that into higher wages for the people making their clothes.

But H&M, whatever their reasons, is serious about recycling cotton, and they’ve set up an annual €1 million prize to be awarded to whoever comes up with the best new techniques to recycle clothing. That’s about $1.6 million, each year, to find ways to reduce waste. That’s a pretty good goal, and it’s a nice sized prize, which might get people in the industry to start actually thinking about recycling more, and might be able to get some scientists and other researchers to look toward that subject as well.


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