EP. 22: It’s a seed-round week, 500 Global B16 is out, and Ecuadorian Kushki grab Mexican Billpocket
Welcome to Scenius Mexico: Your weekly newsletter on technology, innovation, and startups in Mexico.
It’s a seed-round week. Super-charged with credit-lines, three Startups have announced multi-million dollar funding in the last few days. With less equity capital available, Startups are exploring alternative financing routes including debt facilities. While common in traditional business, debt was so far forsaken to the benefit of equity financing in the startup world. But a better balanced funding strategy might give startups a more stable foundation.
Merger and Acquisition slowed down, but recently minted unicorn Kushki still grabbed Mexican Billpocket to keep building a modern payment infrastructure for the LatAm region.
Lastly, 500 Global Accelerator announced its 16th Batch, in which 5 Mexican startups are participating. Expect to see some of these names in future seed-round announcements.
Funding Rounds
FinTech Kontempo raises a US$6.5 million Seed round
The startup offering B2B BNPL (that’s a lot of letters) landed a $30 million seed round in a mix of equity ($6.5 million) and debt ($25 million). While retail BNPL solutions have been getting a lot of attention lately, the B2B segment is still undeserved. Even if most B2B purchases and procurements are spread out over time (e.g, net 30-day terms), the deals aren’t structured in the way consumer-style BNPL plans typically are.
Kontempo allows sales teams to approve credit for offline or online purchases with net terms of 30, 60, or 90 days. Alternatively or in addition, enterprises can use Kontempo’s API to deploy a BNPL option at checkout that doesn’t require a credit card or bank account information. The question is whether there’s a strong appetite in B2B for the products that Kontempo’s selling.
The new cash will be used to hire staff, grow Kontempo’s merchant network and further develop the technology underlying its platform.
Sector: FinTech - BNPL
Total Raised: US$6.5 million Equity + US$25 million Debt
Founders: Matthew Meehan, Antonia Marino
Investors: Portage Ventures, Scor P&C Ventures, Upper90, IGNIA Partners, Tectonic Ventures, Asymmetric Capital Partners
Miferia raises a US$7 million Seed round
The Startup is developing a curated website connecting independent retailers in Mexico with domestic brands in categories like cosmetics, food and beverage and home décor.
Tariq Musa, founder and CEO of Miferia, noted that over 90% of retail in Mexico still takes place in just 2 million physical stores, and less than 1% of B2B transactions have moved online and are largely still dependent on cash transactions, which often requires retailers to pay upfront for merchandise.
That’s where Miferia, founded this year, comes in. This enables retailers to bring their inventory relationships online, expand their product selection and get more favorable credit terms.
The founder has spent several months putting together a team, building a minimum viable product and working with customers. Now the company is ready to accelerate growth and will use the new capital to build liquidity in the marketplace and add to its team of 30.
Sector: Marketplace - Retails
Total Raised: US$7 million
Founders: Tariq Musa
Investors: Bain Capital Ventures, Tiger Global, Canary, Latitud, Asymmetric Capital Partners
FinTech Uellbee raises US$2.3 million Seed round
The funding comprises a $350,000 seed-round with angel investors and a $2 million debt line from APx Capital to support people with credit card debt to refinance those liabilities with loans that adapt to their income and automate the management of their finances.
Uellbee offers flexible and personalized financing to customers and provides them with a simple and accessible tool for managing their debt and personal finances. The fresh funds will be used to further develop its innovative technology and capabilities to lend to new clients.
Sector: FinTech
Total Raised: US$0.35 million Equity + US$2 million Debt
Founders: Giuseppe Attene, Regina Reyes-Heroles, Francisco Meré
Investors: APx Capital (Debt)
VC - Accelerators - M&A News
500 Global LatAm announced its B16 edition
This week 500 Global LatAm has announced its 16th batch. Of the ten companies selected this time, five are from Mexico.
Avioneta: a monthly subscription for people who overindulge, or are alcohol dependent, to help them improve their approach to drinking.
ConfiAbogado: an online legal firm that provides legal solutions to low-income people.
Gloset: second-hand marketplace for formal clothing.
Sapiens Medicus: an online medical education with personalized content and virtual reality simulation.
Scouter: a marketplace that allows renting any space or location for filming and events.
500 Global will work with these new startups to strengthen three areas: growth foundations, improved leadership for the organization, and equity raising. Furthermore, the startups will receive US$60 000 in investment each.
Ecuadorian Unicorn Kushki acquires Mexican Billpocket
Billpocket is a Mexican financial services platform that allows businesses to accept card payments. Founded 10 years ago in Guadalajara and with more than 170 employees, the company was one of the first aggregators in the country, a key element to facilitating electronic payments by operating as an intermediary between banks and businesses.
Kushki, the newly minted Ecuadorian Unicorn, is on a mission of connecting LatAm through payments with the development of new, modern payment infrastructure for the region.
Billpocket’s technology and offline payment infrastructure strengthens Kushki’s consolidation in Mexico and the company expects a 3X growth in the up upcoming months.
The intent to acquire the company has already been approved by Mexico’s Comisión Federal de Competencia Económica, COFECE and the transaction is in the process of closing and is expected to be completed during the next couple of months.
Techstars Payments powered by Stellar and MoneyGram
This new incubator program focuses on innovative fintech solutions addressing gaps across payments infrastructure throughout Latin America. They are looking for founders who are already using or are interested in using blockchain to scale their technology across the following themes: digital wallets, infrastructure, transactions/e-commerce, credit/debt, digital identity, infrastructure as a service, and financial literacy.
Applications end on September 28th, with the program starting date set for January 3rd, 2023. You can find more here.