Emerging markets lender plans to raise additional funding for scaling in the region.
ID Finance, the fintech company operating in Europe and Latin America, saw revenue of $49m in 2018. This represents growth of 236% for the business, which was formally separated from its operations in Russia and CIS region last year. The data science, credit scoring and digital finance company is now planning to roll out new technology-powered financial products as it seeks to capitalise on the rapidly growing fintech market in Latam, where it saw revenue growth of 403%.
ID Finance – which now focuses on Spain, Brazil and Mexico – uses both traditional and alternative sources of data to improve access to competitive financial services and help customers build their credit profile. The company is headquartered in Barcelona, employing over 320 people.
The company is enjoying particularly strong growth in Latam, one of the world’s fastest growing markets for fintech adoption thanks to high mobile penetration and a sizeable underbanked population – according to the World Bank 61% of Mexico’s population is excluded from the traditional banking system, while 40% of Brazil’s 207m population are blacklisted. The company now has 141 employees in Latam.
“We’re at a pivotal moment for fintech in Latin America,” comments Boris Batine, co-founder and CEO at ID Finance. “These countries have been characterised by low competition and very high underbanked populations. Young, tech-savvy generation, which are at large excluded from traditional financial products, there is an enormous opportunity for fintechs.”
ID Finance has rapidly growing customer base with around 20,000 new users each week and a 90% customer retention rate. Its proprietary risk management system uses machine learning and advanced data science techniques to improve access to financial services. It is also leveraging emerging technologies such as behavioural biometrics and AI-based fraud scoring to reduce non-performing loans.
“We are happy with our progress so far and are now planning aggressive expansion through diversification into additional lending products, money transfers, credit monitoring and financial literacy tools. We plan to increase loan issuance sixfold this year in Latam, as well as improve brand awareness,” continues Boris Batin, co-founder and CEO at ID Finance.
According to Goldman Sachs, Brazil has an estimated revenue pool of $24 billion for fintech companies over the next 10 years, with payments, lending and personal finance the most promising segments. Meanwhile Finnovista, a fintech startup accelerator, has predicted that fintechs could take up to 30 per cent of the Mexican banking market over the next decade.