Ep. 59: From Big Moves & Big Money: Mexico's Startup Scene Heats Up!
Hola Miranda Scenius readers,
This week, the Mexican startup scene showed no signs of slowing down. AI-driven industrial OS firm, Tractian, secured a US $47 million Series B, pointing to a potential IPO in the near future. Meanwhile, Klar bagged a US $100 million credit line from Victory Park Capital.
In an interesting move, Clara decided to move its headquarters to Brazil, although it will maintain strong ties to Mexico, while OLX Autos decided to bid adieu to the Mexican market, despite strong metrics, a decision reflecting the challenges of matching supply with demand.
Stay tuned for more exciting news and our deep dive analysis on the EdTech sector in Mexico.
Follow The Money
Tractian raises a US $47 million Series B
Tractian is an AI-driven industrial operating systems firm. Between 2022 and 2023, the startup experienced significant growth, doubling its client base to over 500 multinational companies. Fun fact, Paul Kwan, who was responsible for the success of Samsara’s IPO, is a new investor in the company. With General Catalyst as the lead investor; it is clearly signaling a potential IPO next year.
Sector: Industrial Tech
Total raised to date: US$47 million
Founders: Leonardo Vieira
Investors: General Catalyst, Trevor Oelschig, Deep Nishar, and Paul Kwan
FinTech Klar secures a US$ 100 million credit line
The newly secured credit line comes from investment firm Victory Park Capital. This move aims to expand its lending portfolio in Mexico. Currently, Klar provides payment services, investment accounts, and loans to approximately 2.4 million customers. Klar's initiative is part of a broader trend, with numerous FinTechs emerging to offer alternatives to traditional banking in Mexico.
Sector: FinTech
Total raised to date: US$150 million in Debt
Founders: Daniel Autrique, Stefan Moller
Investors: Victory Park Capital
Startups News
Clara is relocating its headquarters from Mexico to Brazil
The FinTech’s move comes after receiving a license from Brazil's central bank to operate as a payment institution. This strategic move aims to bolster Clara's growth in Brazil, which the team predicts will become its primary market by 2024. The new license will enable Clara to offer services like express wire transfers and deposits via Brazil's instant payment system, PIX. Despite the shift, Clara will continue to have operations in Mexico and Colombia.
DolarApp partners with Paymentology
Paymentology, a card issuer-processor, has collaborated with DolarApp, a Mexican startup offering digital dollar accounts in Latin America, to provide millions of Mexicans with dollar-denominated credit cards. These cards come with no foreign exchange commissions and transparent market rates. Users can transact internationally, digitize their finances in dollars, and utilize an international Mastercard at competitive exchange rates. The partnership aims to improve financial inclusion in Mexico, where digital fintech companies like Paymentology and DolarApp are becoming increasingly essential due to their lower costs compared to traditional banks.
Fiado launched a new card powered by Pomelo
The Mexican FinTech Fiado, dedicated to enhancing the financial experience of Latino migrants in the U.S., has partnered with Pomelo. This initiative allows users in the U.S. to store dollars in a bank account and efficiently pay expenses in Mexico with a credit card. What sets this offering apart is the capability for users to make payments in Mexican pesos from the U.S. through the Fiado App, thanks to Pomelo's integration.
VC - M&A News
Mexican Web Hosting NEUBOX acquired Hospedando.mx
The Web Hosting and domain registration company is reinforcing its leadership in the sector with this strategic move. NEUBOX aims to boost its client portfolio by 50% and manage approximately 250,000 domains by year's end.
Rest of the World
OLX Autos exit the Mexican market
The announcement comes just three years after its entrance in 2020. This follows the company's earlier statements in July about wrapping up its operations in Argentina and Colombia. Resulting from the merger of Vende Tu Auto and Autobastas, OLX Autos aimed to be a dominant player in the used car market in Mexico, which saw a quicker recovery post-pandemic compared to the new car sector. But even though OLX Autos reported good metrics, it faced challenges in balancing supply and demand.
Colombian Vaki expands to Mexico
The crowdfunding platform move coincides with a 40% surge in the establishment of crowdfunding platforms in Mexico compared to 2022, as reported by the Association of Collective Funding Platforms (AFICO). Vaki's approach seeks to revolutionize the donation mindset in Mexico, encouraging even minor contributions and fostering a proactive engagement in crowdfunding.
EdTech Innovation Amidst Connectivity Challenges
Education Technology (EdTech) isn't just a fad; it's a transformative force aimed at revamping educational pathways, from university classrooms to corporate boardrooms. It overcomes geographic or economic barriers to education, allows for more personalized learning pathways and approaches, and helps teachers, schools, and businesses organize their educational approaches.
Historically, Latin America might not have been the poster child for tech adoption, given its challenges with connectivity. But fast-forward to today, and it's a burgeoning hotbed for EdTech. The catalysts? A significant uptick in internet accessibility, skyrocketing digital literacy rates, and a young demographic yearning for state-of-the-art education. Case in point: INEGI data reveals that during the 2021-2022 academic year in Mexico, a whopping 72% of students pivoted to online or hybrid learning modes, underpinning the region's digital leap.
In Mexico, a few companies have been driving innovation in the sector. An OG in the space, Collective Academy was founded with the mission to revolutionize higher education in the country, addressing the skills gap in the region by offering programs that are more aligned with the needs of the modern job market. The startup provides various programs ranging from full-fledged master's degrees to shorter courses.
Slang, which has a base in Boston, Colombia, and Mexico, saw a gap in the professional sector, where company and personal growth could be inhibited by a lack of English fluency. As a result, they have sought to support specific industries with technical English knowledge, grow individual career opportunities, and help businesses go global. In 2021 they raised a series A of US $ 14 million.
Simón, a micro-learning platform that simplifies lifelong education for people within the traditional economy by making them as productive as their corporate partners, is focused on empowering the backbone of Latin America’s industries. There are more than 12.6 million micro and small enterprises (MSEs) and their needs are evolving with the new digital world.
Finally, FinTech mattilda decided to focus on the educational sector and has been a recent trailblazer, with the company providing a collections management system, alongside a range of payment options for private schools. They also offer funding through loans and help organize school finances. They cater to 35,000 students and just closed another $19 million Series A investment.
Globally, EdTech funding rose from US $4.4 billion in 2017 to US $20 billion in 2021. It is also estimated that the market will reach 2028 with an annual growth rate of 20%. It remains to be seen which EdTechs will reach new heights in Latin America; however, there are plenty of interesting and innovative approaches to learning. As the sector inevitably begins to integrate AI to support learning and increased personalization, the range of EdTechs should blossom further.
See you for the next edition. Have a question or any feedback? Just hit reply. We'd love to chat!