Ep. 38: Zero Equity Funding Rounds. Luckily Venture Debt is still Available.
Welcome to Scenius Mexico: Your weekly newsletter on technology, innovation, and startups in Mexico.
Nope, it’s not a bug. This week no equity funding rounds were announced. Ni modo, Startups are diversifying their financing options like mattilda and Konfio did with Addem Capital and Goldman Sachs.
The technology market is still tense and another OG announced it was closing: buying and selling marketplace Segundamano.
Meanwhile, international startups are making the move to Mexico and local startups are joining forces with foreign competitors (read: being acquired).
Venture Debt Rounds
Hybrid Startup mattilda receive a loan from Addem Capital
The Startup which operates at the intersection of the FinTech and EdTech sectors, recently announced a US$10 million credit line financed by Addem Capital.
mattilda offers financing for schools to access more liquidity and offers payment facilities to families allowing them to cover their kids scholarships. In addition, the startup developed a platform for schools to help them better manage their finance and administrative needs.
Sector: FinTech - EdTech
Total raised to date: US$10 million
Founders: José Agote, Adrián Garza
Lenders: Addem Capital
FinTech Konfio extend its credit line with Goldman Sachs
The Startup backed by SoftBank provides unsecured loans to small and medium businesses in Mexico, which, as you can imagine, requires a lot of capital to operate and deploy further down the line.
In 2019, Goldman Sachs extended US$100 million in secured credit to Konfio, allowing them to offer US$250 million in loans to 25,000 companies. This week, together with Gramercy, Goldman Sachs renewed its initial loan and increased the secured credit line to US$230 million.
The new capital will be used to make loans to another 10,000 SMBs, typically ranging from US$10K and US$150K, and also renew credit lines with their existing portfolio companies.
Sector: FinTech - Lending
Total raised to date: US$690 million
Founders: David Arana, Francisco Padilla
Lenders: Goldman Sachs, Gramercy
Startups News
Segundamano is closing shop in Mexico
An local solution for anyone looking to buy or sell something on the internet, Segundamano has struggled in recent years to stay on par with its competition and experienced a 30% decline of traffic on its website. In an email sent to its users, announcing the end of its operations, the team's main reason for closing was as a horizontal platform they weren’t able to compete with more specialized vertical ones. Success is never guaranteed.
Bitso launches its own Card but without crypto
The crypto exchange unicorn made headlines by launching its own debit card that will allow its users to pay for products and services throughout Mexico and the world. Cards holders will have to deposit Mexican pesos to their account to be able to use the product. The surprise came from the fact that users won’t be able to make payments with their cryptocurrencies. While it is unclear why, it might be so as not to compete with Rappi, which recently launched its own card too - in partnership with Bitso. Still, it’s an interesting move for a crypto player to enter the more traditional FinTech space.
Alohome partners with Intelimetrica
Two weeks ago we covered PropTech Flatmx’s acquisition of Intelimetrica. The deal seems to be good as today we heard that Intelimetrica will also be used by Alohome as it seeks to generate US$100 million of transactions in the country. As a reminder, 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’s data analysis capabilities in the background.
VC - M&A News
Chilean Rankmi raises new capital to buy Osmos
SoftBank Latin America is not dead. They recently led a Series A for HRTech Rankmi to give them the resources needed to accelerate in Latin America and Mexico. A portion of the funding was used to buy local HRTech Osmos and merge the two companies with better technology, more partnerships, and a stronger user base. The Rankmi founding team also made it clear that they plan to make more acquisitions in the near future, especially in the AI space.
Upload Ventures is seeking to raise a new $250 million fund
TechCrunch reports that the Mexico- and Brazil-focused firm, Upload Ventures, in partnership with the Brazilian telecom operator TIM, will create a 5G-focused investment fund.
Co-founded by Rodrigo Baer and Marco Camhaji, Upload Ventures spun out of SoftBank’s investment arm one year ago and started with a focus on early-stage investments, although it’s adding growth stages to its focuses.
Rest of the World
Colombian Mezubo to launch in Mexico
The FinTech specialized in offering financing to buy a car, was first successful in its home market before expanding to Mexico. Following a US$5.5 million capital injection, the founding team decided to seize the opportunity to enter the Mexican market despite a strong competitive landscape with well-known and well-established existing players like Kavak and OLX Autos. The startup already closed a partnership with CIBanco and is planning to open first in Mexico City, Guadalajara, and Monterrey.
Ronni Samir is the Co-founder of pidedirecto.mx. Born in Iraq, he moved to Sweden as a young immigrant but decided to stay in Mexico in 2017 after a semester abroad and falling in love with the business opportunities in this country. His initial feeling and small “data” points were that Uber had recently entered the Mexican market despite being viewed as the northern neighbor, and, in his opinion, it was just weird that Mexico was being prioritized. Today, Mexico is one of the largest markets for Uber.
Pidedirecto is an all-in-one cloud-based restaurant management platform that helps restaurants increase revenue, improve customer experiences, and streamline operations. This includes order management, payment processing, inventory, logistics, and integrations. Today they have 4,000+ locations operating with their solution.
What would you have liked to know before starting your company?
I always knew I would be an entrepreneur. Since I was 9 years old, I was selling “virtual” furniture in an online game called Habbo Hotel for real money to my neighbors. So, I decided to study business throughout my career. One thing that was disappointing was that school never really gave us “real” projects to work on to realize from the start, an idea is always a hypothesis, and this hypothesis needs to be tested in real-life and you need to gain the first dollar as quickly as possible to confirm market fit. Until the first dollar, you are still in your hypothesis stage - a hard fact many entrepreneurs don’t want to believe.
What do outsiders often fail to understand about your company?
Pidedirecto is an omnichannel solution for our partners. However, external parties, such as new investors, tend to see us as competitors to Rappi, Uber, and Didi. But in fact, they are all very important providers for our logistics and integration solutions.
What is one thing you can talk about for hours?
New business ideas with my friends. Because of my crazy idea of moving to a foreign country and starting a business, I receive many calls from back home to give feedback on how they can get started. I always give them “small tasks” that I expect them to deliver on the week after, so they get the ball going. These tasks could be, registering a brand name or creating a logo with a freelancer from Fiverr, etc. Starting a new venture is all about getting over the first obstacle. How hard is it to run 40km the first day you decide you want to make a career in running? Fool your brain by saying you will start by running 1km and you will probably at least do 2km the first day you go for a run. The same goes for a business, small tasks in the beginning.
What’s the weirdest job you’ve ever had to do?
When I was 15, me and some schoolmates bought balloons from the store and sold them during our lunch breaks to parents in the city center by turning these balloons into funny animals. Quite hefty margins and all the kids cried to make their parents buy one. It was fun until we started making too much noise (and money) and the police were asking whether we had a business and certain permissions to run it.
What makes you bullish on the Mexican Startup ecosystem?
Growing Startup community. Growing talent. Growing middle-class. Many factors are in place for the next billion-dollar businesses in Mexico and LATAM.
See you for the next edition. Have a question or any feedback? Just hit reply. We'd love to chat!