Regardless of the difficulties experienced by the digital sector, ID Finance is managing to scale its business at full speed. The startup, founded in Barcelona in 2015, expects to invoice 210 million euros this year, which is 30% more than the previous year. In addition, the firm expects to obtain a net profit of more than 8 million, which represents a growth of 50% annually. The workforce reaches 500 workers, distributed between the headquarters in Barcelona – which has just opened offices with 150 workers – and the centers in Madrid, Poland and Mexico.
The good moment that the company is experiencing – which today is one of the largest fintech companies in Barcelona – is explained by the nature of its business. Boris Batine, co-founder of the business with Alexander Dunaev, explains that ID Finance is dedicated to offering microcredits online to individual consumers, the vast majority of whom are under 35 years old. The service is agile, it is contracted automatically, and since its inception it has transacted 6 million credits. Batine, an entrepreneur of Russian-Israeli origin, explains that the key to the business lies in the interest rate he demands from his clients, which is usually around 20%, although the percentage varies depending on each case. According to the manager, about 10% of clients are unable to repay their debt and then, the company, like any other financial entity, follows the legal course in court to claim repayment of the amount.
With this business, the company has expanded throughout the Spanish (70%) and Mexican (30%) digital markets. “Both markets present a great business opportunity and few barriers to entry, which is why we chose to set up shop there,” says Batine, who recalls that he chose to set up the headquarters in Barcelona, opposite Madrid, due to the robustness of its digital ecosystem.
Looking to the future, the fintech hopes to gain more customers in both countries through a new product: a credit card, called Plazo, which offers a series of benefits to its clients. To do this, the company has obtained a banking license that it rents to another company, called Pecunia.
Batine explains that the company has financed its launch – and the growth of the business in general – through contributions from investment funds. Since its inception, the startup has raised 40 million euros of capital (contributed by Kingsway and Crowdcube) and 70 million of debt. As a result of these operations, the two founders have lost control of the property, although they have always remained in charge of the management.
