Ep. 68: Two FinTech rounds in the Open Finance and Financial Inclusion sectors
Welcome to Scenius Mexico: Your weekly newsletter on technology, innovation, and startups in Mexico.
This week two main rounds of financing, Finerio Connect and Axify, are exemplary of the growing emphasis on open finance and financial inclusion in Mexico. The FinTechs respectively aim to standardize open banking and offer interest-free payment options.
Simultaneously, Australian unicorn Airwallex's purchase of MexPago and cross-border initiatives like IESE's European Union-funded program underscore Mexico's growing allure as an international hub for startups. The news also signals a pivot in investment trends in the country. This is evidenced by Miranda Ventures' innovative equity-for-services approach and The Ganesha Lab Fund I's targeted investment in biotechnology, spotlighting the diversification and sophistication of investment models in the region.
Additionally, the move by Nu México to transition from a Sofipo to a full-fledged bank illustrates how homegrown FinTech companies are scaling up and formalizing, possibly influencing the traditional banking landscape.
Follow The Money
Finerio Connect secures US$ 6.5 million funding round
The Mexico City-based FinTech is developing an open finance platform aimed at offering tailored financial products and services across Latin America. Co-founded in 2018 by Nick Grassi and José Luis López, the company currently works with over 120 financial institutions, launched an API hub in partnership with Visa, and recorded a 700% growth in API usage over the last 18 months. The recent financing will facilitate key hires, including CTO José Santacruz López, underscoring Finerio's ambition to standardize open banking in Mexico and the region.
Sector: FinTech
Total raised to date: US$9.7 million
Founders: José Luis López Amador, Nick Grassi
Investors: Third Prime, Visa, Bancolombia Ventures, Krealo, Winklevoss Capital
Axify raises US$ 1.3 million in funding
The FinTech is offering interest-free payment options to consumers. Launched in December 2020, Axify aims to disrupt the market with its "save now, buy later" model, allowing customers to reserve and prepay for products or services. The platform not only alleviates debt burden but also partners with over 44,000 convenience stores for direct payment, promising a risk-free and personalized shopping experience. Axify's innovation addresses the critical gap in formal credit access, with 53% of Mexican adults lacking such facilities, according to a national survey. The startup is currently targeting the retail sector and aspires to drive equitable economic growth.
Sector: FinTech
Total raised to date: US$1.3 million
Founders: Rodolfo Valdés, Sofía Robles Santamarina
Investors: Alpha Impact 8, Avalancha Ventures
Startups News
Money Giver partners with Pomelo
The two startups have partnered to launch a new credit card aimed at empowering corporate employees. Leveraging Pomelo's card-issuing technology, the card offers flexible credit lines, bonuses, and exclusive benefits, promising a seamless financial experience for its users. This strategic alliance aligns with Money Giver's enduring mission to strengthen Mexican businesses and their teams by providing an all-inclusive financial management tool.
Nu México requests a license to operate as a bank
Nu México is requesting official authorization from the National Banking and Securities Commission (CNBV) to transition from being a Popular Financial Society (Sofipo) to a full-fledged bank in Mexico. This shift is strategic, as the banking prospect promises expanded services, like payroll flexibility and higher deposit limits. It is worth noting that Mexico would be the first country in which the FinTech would operate as a bank.
VC - M&A News
Australian unicorn Airwallex acquires Mexico-based MexPago
This move comes as the FinTech sector witnesses increased traction in the Latin American region, with industry giants like PayPal, Stripe, and Block also making strategic moves. Born in Australia, Airwallex has grown exponentially over the last years, and now serving international markets such as the US, UK, China, and Singapore. The company processes transactions exceeding USD $50 billion annually, with partnerships from industry like American Express and Shopify. The CEO of Airwallex, Jack Zhang, underscores Mexico as a pivotal hub for their global strategy, particularly amidst the prevailing economic complexities between the US and China. One of the primary incentives for this acquisition is to expedite the attainment of the Electronic Payment Funds Institution (IFPE) license in Mexico. This license paves the way for Airwallex to offer local payment methods, greatly enhancing their value proposition in the region.
Miranda Partners and AMG Block Ventures unveiled "Miranda Ventures"
Miranda Ventures is a new venture capital fund that invests in Mexico's startups. What's notable about this venture is its unique approach: startups can exchange shares for services offered by Miranda Partners and AMG Block Ventures experts, the two firms behind the endeavor. This unique model arrives during a time of shifting venture capital dynamics in Latin America. With the potential to offer startups a different kind of support, it'll be interesting to monitor the impact of Miranda Ventures in the broader landscape.
IESE has secured EUR €4.3 million from the EU
IESE Business School has secured EUR €4.3 million from the European Union to foster entrepreneurship and tech adoption in Latin America for the next five years. The school will co-lead three key initiatives aimed at bridging the gap between technological research and market application. These projects include partnerships with top-tier engineering institutions and the European Innovation Council, focusing on fast-tracking innovation commercialization and fostering transcontinental collaborations. This commitment aligns with Latin America's growing reputation as a hotspot for entrepreneurial ecosystems.
The Ganesha Lab launches a US$ 10M Fund
The Ganesha Lab, in collaboration with Deep Tech, has unveiled a US$ 10 million fund targeted at propelling Latin American biotechnology startups. Named "The Ganesha Lab Fund I," the fund aims to invest in approximately 25 pre-seed and seed-stage companies that focus on human and planetary health, including innovations in food and agriculture. Each selected startup could receive an average investment of US$ 200,000. This financial commitment not only reflects confidence in the region's rich biodiversity and scientific potential but also aims to catalyze regional innovation in critical sectors like life sciences, health, and agrifood tech.
Rest of the World
Argentinian Nippy to open first service center in Mexico City
The “WorkerTech” startup Nippy, in partnership with Rappi, has opened its first Nippy Center in Mexico City, with plans to expand to Guadalajara and Monterrey and capture 25% of the market share within a year. The center, which saw over 3,000 users connect to the Nippy app within the first 15 minutes of its opening, offers an array of services to gig economy workers, including restrooms, snacks, mechanical assistance, and Wi-Fi access. Nippy aims to address the unmet needs of gig workers in the city and across Latin America, offering benefits such as specific mobile plans, accident and illness insurance, and educational opportunities.
See you for the next edition. Have a question or any feedback? Just hit reply. I'd love to chat!
Arnaud