Global Analytics buys e-commerce firm – U-T San Diego

Global Analytics, a San Diego company that uses big data to create real-time credit profiles of marginal borrowers, said Monday it has purchased specialty online marketplace, which lets buyers finance purchases through payroll deductions.

The move signals a new strategy for Global Analytics to penetrate the U.S. market. It already has a substantial credit scoring and lending business in the United Kingdom, making online installment loans to people with limited credit.

The company sought to partner with established lenders in the U.S. — giving them access to its unconventional credit scoring technology so they could offer better loan terms to people with little or no credit history.

That strategy failed, as domestic lenders balked at changing the way they serve these so-called unbanked or under-banked customers — an estimated 60 million people.

So Global Analytics is now entering the U.S. market itself through its purchase of The price was not disclosed.

“What this acquisition does is let us serve that (unbanked) population with a direct commerce offering,” said Michael Thiemann, chief executive of Global Analytics. “These are people who have traditionally gone to a rent-to-own store or have to take out a very expensive loan to buy these things. Now, for the first time, they can buy at the regular price and have 12 months to pay at absolutely no charge whatsoever.”

Lenders serving marginal borrowers typically charge higher interest rates and fees — or mark up product prices — to account for the higher risk that the borrowers won’t pay.

Using complex mathematical formulas to analyze data, Global Analytics believes it has uncovered a better way to assess the credit risk of people with unconventional borrowing histories. It looks at traditional credit-screening data, such as vehicle registrations or phone numbers and address verifications. But it also looks at unusual information, such as Web cookie data and social media posts.

Web cookies might show if borrowers visit gambling sites or job training sites. Social media can reveal how many friends a borrower has and how long they’ve had them — signs of stability.

In the U.K., Global Analytics operates under the name Zebit. It has more than $100 million in revenue and is profitable, Thiemann said.

Workpays. me operates as an employer-sponsored benefit to workers. It offers computers, electronics, furniture, home goods and other gear — more than 20,000 items. Employees pay via payroll deduction, automatic withdrawals from debit cards or other means. It has several million customers.

“Having the financial backing of an established company like Global Analytics is going to give workpays. me the fuel it needs to scale quickly,” said Hans Morris, a workpays. me adviser and former Visa president.

The website also lets individual consumers make purchases and arrange direct payment financing — though most of its users today are employer sponsored. Global Analytics hopes to expand the e-commerce platform into the U.K., Thiemann said.

Since 2009, Global Analytics has raised a total of $95 million in debt and equity financing, including a $30 million credit facility in 2013 from Crystal Financial of Boston.


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