Creamfinance is one of the fastest growing European Fintech Companies that provides quick short term credit solutions to people who would like to borrow small amounts of money to meet an emergency or unexpected financial needs. Matiss Ansviesulis, Co-founder and CEO of Creamfinance, gives us an insight into its unique ways of lending, in the following interview;
1) How did Creamfinance start and where did the idea come from?
We launched in 2012 in Riga, Latvia, based on the idea to provide one-click loans to clients globally. Having an idea to focus on customer experience, we wanted to build a strong analytics team. We built the technology that is about managing the process of approval for loans scoring. This can be rolled out across borders to different countries and that allowed us to scale fast. We’re focused not on getting as much data as possible but looking for data that is valuable while ensuring it is still accurate. That ensures prompt customized service that our clients expect.
2) What is your current business model?
We’re a consumer finance company that focuses on Smart Data, which translates in the most accurate way of measuring credit readiness. Long story short – we assess applications by analysing online data and credit intel from traditional sources and focus on limited, value-adding data points. Our target customer is an individual in need of additional small amount of money due to an emergency or unexpected expense. Our product portfolio consists of three types of loans – instalment, lines of credit and small loans. We are proud to have a wide range of financial products across all 6 of our operating markets – Latvia, Poland, Czech Republic, Georgia, Denmark and Mexico.
3) What benefits do you see in partnering with the Flint Capital, Blackmoon Financial Group and Mintos platform?
Both Blackmoon and Mintos provide access to funding. Both of these platforms offer us opportunities to diversify our funding sources and reach larger investor base.
We teamed up with Mintos last year at the end of summer to introduce a new product on their platform – consumer loans issued in Georgia with repayments in several instalments. Obviously, we were looking for opportunities to expand our product offering. Teaming up with Mintos was a good win-win opportunity for us and them, and investor interest in loans issued by us was very good.
4) What makes loans from Mintos different from those given by banks?
Mintos does not issue loans themselves – loan originators do it, which is the reason why the company has a unique offering at the moment. Mintos lets investors to invest in loans originated by non-bank lenders. For lender, using Mintos lets them focus on their core skill of originating loans, freeing them from having to create their own platforms. Compared to other ways of financing loans, Mintos has created an “on demand” concept allowing lenders to list and fund the loans they seek to finance. As a result, loans become cheaper and more available to borrowers.
5) Who are your biggest competitors?
The alternative lending industry is very hot right now, attracting both attention and investment alike. Normally, a fast end-to-end application process is the largest differentiator in personal finance, which dictates that your application process should be as easy and understandable as 2×2, so simple and seamless application process is far more critical than anything else in many cases. Quick decision process by lender, combined with flexible products and terms is the sweet spot – and that’s what we’re aiming at. And since competition increases, it is crucial to differentiate. Taking our smart data approach as well as focus on one-click loans to increase the speed of service delivery, to date, there is no direct competition that would be working towards the same objective as us. When it comes to alternative lending online we have several competitors – 4finance, Kreditech and others. However, it is worth noting that Creamfinance has become a top-five online lender in Europe in half the time most of our competitors have been on the market and with 10 times less financing raised.
6) Last year, Creamfinance was named National Champion in the European Business Awards 2016/17. Why do you think the company was selected among other European fintech companies ?
Not only that – the company has also been ranked to be the second fastest-growing company in Europe by Inc.500 and has been shortlisted by Google and McKinsey as a top 50 Digital Company in Europe. Being quite a pragmatist I obviously thought that it’s nice to be acknowledged, and that just pushed our company even more to focus on operational excellence. I believe our company got noticed due to the nature of our business: comparing us with other companies operating in the industry, we managed to survive, become profitable, scale and reach good numbers with 10 times or less investment. That’s something to be proud of.
7) Recently, Creamfinance closed a €1M investment round by Flint Capital. Can you tell us where this new fund is being employed?
We’ve closed an investment round as Flint Capital, the VC fund that has invested in Creamfinance three years ago, has repeatedly invested in Creamfinance.
8) What are the challenges that Creamfinance currently faces?
Expansion in new markets both geography-wise and product-wise. Also, as we have experienced, it’s quite a challenge to adapt to a rapidly changing regulation in Fintech.
9) Why did Creamfinance choose to launch in Mexico instead of other places such as USA or Australia?
Our company focuses on emerging markets that have good infrastructure. Both the US and Australia are large, fully-developed and very competitive markets, so from that perspective it did not (and does not) make sense to expand over there.
10) What advice can you give entrepreneurs who want to venture into fintech sector in the future?
Don’t do what’s popular, do something that makes sense. New Fintech Companies should Fill the niche with something that people need and do it flawlessly focusing on operational excellence 24/7, 365 days a year.