Ep. 26: Kavak Massive Debt; Web3 First Credit Card; Konfío Layoff; and more.
Welcome to Scenius Mexico: Your weekly newsletter on technology, innovation, and startups in Mexico.
Massive debt for Mexico’s first unicorn. Kavak announced a US$810 million credit facility from HSBC, Goldman Sachs, and Santander Bank.
Early-stage startups still get funded with Heru and Naya Homes Seed round, and Bendo Pre-seed round.
On the other end, the party is over for late-stage companies. Unicorn Konfío plans to layoff up to 180 employees next month to focus on profitability over growth.
And last but not least, a nice innovative product with Web3 Startup Crecy launches of LatAm's first Crypto Credit Card.
Funding Rounds
Heru closes a US$6 million Seed round led by Google
Heru’s team started working on an App helping gig workers declaring their taxes, and is now building the tax automation infrastructure for Latin America, making it easier for people and companies to file their taxes by automating specific processes.
While the integration of embedded financial solutions in industries like banking and payments is not a new concept, Latin America is about to witness a new wave of tax innovation. “I’m really excited to be building Heru on the cusp of this technological revolution,” said Mateo Jaramillo, CEO and co-founder of Heru to Latamlist.
The future will tell if the team can build a unicorn out of a boring, complicated, not sexy, but how so important area as taxes is. My bet is that the product will eventually evolve into other FinTech verticals.
Sector: FinTech - Taxes
Total Raised: US$7.7 million
Founders: Mateo Jaramillo, Stiven Rodríguez Sánchez
Investors: Gradient Ventures (Google), Soma Capital, GFC, Moving Capital, Xtraordinary Venture, Magma Partners, Flourish Ventures, Nazca
Bendo, a Social Commerce App, closes a US$1.1 million Pre-seed
The startup is building a platform that allows anyone to discover, share, and sell products via social networks. Their users don't have to put up any capital for inventory or do last-mile deliveries. They also take care of collecting payments so users can focus on increasing their sales.
Strong of the experience working at DiDi, the team mission is to create a digital catalog sales model that anyone can use without cost. All that is required to begin selling products is a cell phone and an internet connection, opening the e-commerce doors to millions of Latin Americans.
Sector: E-commerce
Total Raised: US$1.1 million
Founders: Agustin Garcia, Miguel Navarro
Investors: Canary, Seedstars, Angel Hub
PropTech Naya Homes raises a US$5 million Seed round
Founded only a few months ago and already armed with a US$600-thousand Pre-seed round raised in March, the Startup specializing in vacation and short-term rental management is on its way to exponential growth.
With the goal to helps investment owners, and real estate developers maximize the profitability of their properties, minimize their operational stress and provide them with greater visibility into real-time financial performance. The team also offers both full-service operations services and low-touch revenue management.
Sector: PropTech
Total Raised: US$5.6 million
Founders: Humberto Pacheco, Roberto Fernández del Castillo, Iacopo Santini
Investors: Primary Venture, Flybridge Capital, Clocktower Ventures, K50, Carao Ventures, Trip Ventures, Colibri Equity Ventures, Derive Ventures
Kavak signs a US$810 million credit facility from HSBC, Goldman Sachs, and Santander Bank
Presumably, last year US$485 million Series D and US$700 million Series E were not enough for Mexico’s first unicorn.
Launched as a used car marketplace, the company has been playing into the auto loans market over the last years and is slowly morphing into a FinTech company. Still, the Startup has made the headlines this year for its enormous investment to debut in the Brazilian market and a growing number of complaints by users about a very disappointing level of operations and service quality.
On the other hand, many late stage startups have recently chosen to take on debt to avoid a down round (were the company is valued at a lower price), and to better balance their sources of financing. According to its directors, Kavak should be profitable by the end of the year or beginning of next year in Mexico. Having to report to bankers and paying back what they owe will force growth stage companies to improve their operations and profitability and put them in better shape to eventually make an IPO.
Startups News
Unicorn Konfío plans to layoff up to 180 employees
The online lending platform for Small and Medium Businesses and Mexico’s unicorn number 4 will make a cut in its overhead as soon as next month. Noticed over a video call, the 180 employees were told that the company is entering a new phase in its growth and need to focus its ressources on bringing more value to its customer base - whatever that means.
Currently the Startup has 930 employees and its last valuation was at USD1.3 billion following a USD235 million capital raise one year ago.
Web3 Startup Crecy launches its first Crypto Credit Card
Powered by Pomelo’s technology - a payment infrastructure and card issuance company from Argentina - Crecy’s card allows its users to put cryptocurrencies as collateral for Mexican pesos loans.
Accepted tokens are Bitcoin, Ethereum, Solana, Cardano, or Polkadot and give access to line of credit ranging from 1,000 to 720,000 Mexican pesos (US$50 to US$35,000 approximately).
The team mission is to give a way for people to unlock the value of their crypto without selling them. A cool product to keep an eye-on.
Rest of the World
Bank of America sees Banxico’s rate closing 2022 at 11%
Mexico’s central bank is expected to hike borrowing costs more than expected, finishing the year with the key interest rate at 11%, up from a previous estimate at 10%, as it prioritizes stability over growth, according to economists at Bank of America.
On monetary policy this means that Banxico will very likely keep hiking with the US Fed. Staying in line with the Fed would also prevent the pesos to depreciate, keep a tight primary balance and the debt to GDP ratio in check.
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