Estonian fintech askRobin scores $1.7M to bring ‘fair credit’ to emerging markets

AskRobin, an Estonia-founded fintech that operates a financial services marketplace for “underbanked” customers in Latin America, has picked up $1.7 million in funding.

The seed round is backed by VC funds Change Ventures, Vereeni Early Stage Fund, BENE Asia Capital, and Lemonade Stand. In addition, a number of tech entrepreneurs from Estonia participated, such as Ragnar Sass, co-founder of Pipedrive, and Taavi Tamkivi, founder of the anti-money laundering platform Salv.

“We started in Mexico in late 2017, where we initially developed a FB Messenger chatbot to bring basic financial education to people,” says askRobin co-founder and CEO Rain Sepp (who previously spent 13 years working at digital lending startup Credit24). “However, we soon realised that we need to go the whole nine yards and make sure we get the lending companies to actually get interested in serving those people and making them better offers”.

Since then, askRobin has evolved into something more comparable to Credit Karma in the U.K., which pairs free credit scoring with a marketplace of suitable financial products. “We bring our partner companies access to risk based customer segments, and get them competing for customers, resulting in improved product offers,” explains Sepp. This, he argues, is far better than the status quo.

“60% of employed middle class in emerging markets are not able to get access to formal credit and are left with predatory prestamistas (loan sharks) on the street. Those people are often just giving up after the first ‘No’ from the bank and getting back to their neighbourhood lender”.

To offer a fairer alternative, askRobin collects relevant financial and other data from customers and helps them build their financial profile so as to become an eligible borrower. Customers then get shown “all relevant offers in one go and can choose the best to save on interest”.

“For lending companies those risk-based customer segments and risk-adjusted product offers increase their approval rates, lower their CAC [customer acquisition costs] and help them to control credit risk – gradually opening up the markets where they simply lacked data and access previously”.

That appears to be working out well for askRobin. At the end of 2018, the startup expanded to Colombia and Argentina, and also now serves Peru. Sepp says that in most of these markets, emerging digital lending fintechs are fighting for market share with informal lenders and “old-school” micro-finance companies, making a product like askRobin a good fit.

“With the lending market getting more and more cautious in the current crisis situation, the service that we offer is increasingly important to the people. And it might work as ‘life-vest’ for lending companies, helping them to focus to the right type of customers and control the credit risk by showing right products to each segment,” adds the askRobin CEO.

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