Ep. 36: Two FinTechs raised money, Jokr is closing, Startups are joining forces, and InDrive is doubling down on Mexico.
Welcome to Scenius Mexico: Your weekly newsletter on technology, innovation, and startups in Mexico.
FinTechs are back in the funding game with NeoBank Vexi and PayTech AirTM receiving new investments this week.
Things are not as rosy for grocery delivery startup Jokr which closed shop in Mexico to focus on reaching profitability in the Brazilian market, its only market left, after it closed down its operations in Colombia, Chile, Peru, and Mexico.
For Startups, 2023 will be a tough year. To weather the storm, many of them decided to join forces with a wave of partnership announcements.
Nonetheless, Mexico is still considered a key destination in a successful foreign Startup’s expansion plan.
Equity Funding Rounds
NeoBank Vexi closed a US$8 million Series A
You already know it, Mexico is less developed than its northern neighbor in terms of credit penetration with high interest rates. Thus, there’s a big opportunity to win market share, and if you can have a social impact on the way, even better.
Founded in 2017 by ex-Citi bankers, Vexi's only offering is a credit card, which it offers through American Express without using any third-party issuers or processors. So far it has focused on 18-35 years old making between $600 to $800 per month.
Competitors include Stori, Klar, Nu Mexico, Bankaya, and Ualá. But Vexi believes in a sustainable way of growth, a slower pace compared to other startups but with solid, positive unit economics to stay in the game in the long run.
Sector: FinTech - NeoBank
Total raised to date: US$11.7 million Equity + US$20 million Debt
Founders: Gabriela Estrada, Rojo Blasquez, Carlos Franco, Cinthia Merlos, Salvador Michel
Investors: Magma Partners, Alpha4Ventures, Pomona Impact, Redwood Ventures, Rebalance Capital
AirTM raises an undisclosed funding round
AirTM connects banking and e-money networks all over the world via its technology platform and P2P network, enabling P2P correspondent banking and remittance. Mainly, the startup focuses on serving Latin American digital companies receiving payment in US dollars.
While the current amount of capital raised during this funding round has not been disclosed, the company has so far raised up to US$25 million over the last 8 years, served more than 3 million registered users and facilitated transactions in more than 190 countries.
Circle Ventures, who led that new round, is the investment arm of a crypto project called Circle that owns the USDC stablecoin. This investment and partnership with AirTM hint at the company's interest in blockchain technology to foster its remittance capabilities and probable next product development.
Sector: FinTech - Remittance
Total raised to date: US$25+ million
Founders: Rubén Galindo Steckel
Investors: Circle Ventures
Startups News
Unicorn Jokr is closing its Mexican operations
The famous “instant” grocery delivery startup based in New York and operating in the Americas is closing its doors in Mexico to focus on the Brazilian market. Nevertheless, it’s not all bad news.
According to its CEO, Ralf Wenzel, the startup recently raised a US$50 million Series C at a US$1.3 billion valuation. But to be able to close the deal, investors wanted the team to focus on profitability over growth - something we would have never heard a year ago. After closing its operations in the U.S., Chile, and Peru last year, Mexico was one of two markets left standing.
FinTech Uellbee partners with Tu Hipoteca Fácil
The two FinTech companies decided to enter a partnership to help Mexicans acquire a home and furnish it without letting their finances get out of hand. With rising inflation (7.9%), the coming years could become tricky for new homeowners. Combining Tu Hipoteca Fácil expertise in the mortgage industry with Uellbee’s financing capabilities, the two companies hope to offer a better product and advice to their customers.
More partnerships happened this week
As mentioned, Startups are looking at how to navigate the chaotic times ahead. And partnering with another company seems to be a reasonable thing to do.
Last week InsurTech Guros partnered with Qiip to offer better car insurance, FoodTech Perfekto partnered with Pizza shop Pixza which focuses on disadvantaged youths by offering them a place to work, online supermarket Jüsto partnered with KiwiLimon to procure the ingredients needed for KiwiLimon recipes, PropTech Pulppo partnered with real estate company Vive Chic to expand into the Mazatlán area and finally, Mercado Pago partnered with BNP Paribas to expand its product offering, entering the InsurTech space.
VC - Accelerators - M&A News
Flatmx acquires data company Intelimétrica
The PropTech company facilitating the buying and selling of residential assets by holding its own inventory wants to better manage its commercial operations by using more data. Mostly, Intelimétrica's strength lies in the collection of market data - a fundamental element in the real estate industry - to build a differentiated offering.
While Intelimétrica was acquired by Flatmx, the team and the name will remain the same. It will continue serving its own portfolio of customers while increasing Flatmx data analysis capabilities in the background.
Huawei launches its accelerator program: Spark
The Chinese multinational technology corporation headquartered in Shenzhen wants to support 60 Mexican startups. In collaboration with the Agencia Mexicana de Cooperación Internacional para el Desarrollo (Amexcid), the selected team will receive annual investments, cloud computing certifications, networking events and help with online advertising.
HRTech Plerk and Minu merged
Minu started as an employee wage on-demand and pivoted a few months ago to an employee wellness company building out gamified and rewards features.
Plerk, for its part, focuses on modernizing perks and benefits for companies in emerging markets. But the macroeconomic environment forced the team to lay off 40% of its staff in December.
As it seems, the expansion of Spanish competitor Cobee into the Mexican market pushed Plerk’s founding team to sell and merge with Minu to remain competitive and offer a more robust solution to its user base.
Rest of the World
Spanish Startup Alterhome is landing in Mexico
The PropTech specialized in managing and renting short-term lodging is opening an office in Mexico City as part of its international expansion plan. The company already manages over 300 units in Spain and is using Big Data to define its pricing, list its properties on more than 100 sales channels, and use digital locks to make the experience more flexible.
InDrive wants to strengthen its presence in Mexico and LatAm
The mobility app competing with the likes of Uber and Didi announced a US$150 million financing with General Catalyst to foster its growth in Mexico and Latin America. Known as InDriver in 2022, the Startup rebranded itself as InDrive (hopefully they didn’t pay too much for the new name idea) and shifted from a mobility app to a marketplace for urban services. Mexico was the first country in Latin America the company launched in 2018 and it found a solid customer base here.
Chilean Almacén Gurú is accelerating its growth in Mexico
The team developed a marketplace and digital suite of solutions to help traditional logistics channels improve their operations and facilitate workflow between suppliers and mom and pop shops.
The startup successfully soft landed in Mexico and within 10 weeks its operations reached the same size of its operations in Chile at its one-year mark in that market. It now has more than 7000 users.
HRTech Buk raises new capital to grow in Mexico
The Chilean born startup closed a US$35 millions round with top-tier Silicon Valley investors to accelerate its growth in Mexico and expand to new countries in the region.
Human resources management systems and recruitement technology are two hot spaces in Mexico right now and competition has been intensifying lately.
Furthermore, this new late-stage investment round in a Latin American company with a focus on the Mexican market is another sign of the confidence of international VCs into the region and Mexico.
Gabriela is the CEO and Co-founder of Hitch. A SaaS using machine learning and AI tools to help recruiters build their own recruitment processes in an optimized way. Previous to her entrepreneurship, she gained experience in consulting, operations and strategy working for companies like Uber and Deloitte. In 2022, she was selected as 30 promesas de los negocios by Expansión México. Awarded 1st place at the Inventures Pitch Competition, Hitch was part of top accelerators such as Google 4 Startups.
What would you have liked to know before starting your company?
Knowing how to find our Product-Market Fit (PMF) from the very beginning would have definitely saved us a lot of time. But I don't regret a single moment spent on that search as we got a lot of lessons and tough experiences that have shaped me to become the entrepreneur that I am today. It is a process, and you mostly learn from the feedback that you get from stakeholders and the people you work with.
What do outsiders often fail to understand about your company?
There are so many tools for HR management and recruitment that cover many different parts or stages of diverse processes. Hitch is a suite that provides tools for talent acquisition managers to create their recruitment funnels leveraging our AI-powered tools for the search, assessment and onboarding of candidates.
What's one thing you can keep talking about for hours?
There's this meme that says: "How can you tell if someone ran a marathon? Don't worry, they'll tell you."
In my case, this applies to marathons and triathlons. I get excited when people ask me about my personal interests because I can talk about my passion for sports. Although I'm not that outstanding at any, I love to practice many as much as I can. On a daily basis, I am into triathlons, but also enjoy playing tennis on the weekends, hiking, snowboarding or kitesurfing whenever I get the chance.
What’s the weirdest job you’ve ever had?
Doing consulting at LCG in LA for a cheese factory project. I had to log all the movements of the workers at supermarkets, tracking how they would cut, pack, etc. These activities took place at the butchery behind the stores, it was very gross to spend my entire day there watching next to the side that processes meat.
What makes you bullish on the Mexican startup ecosystem?
A big community of founders is rising in Mexico City. More and more VCs are coming around to our country as it is becoming a tech hub. More and more startups are migrating their operations from international destinations to here. Accelerators as well as capital firms are opening headquarters in our country. It is amazing to already have eight unicorns in our country with so many more in the pipeline.
Those startups which get it right after this economic downturn will definitely thrive and get stronger, keeping the Mexican flag in the spotlight.