Ep. 79: Mexican FinTechs are still in the game
Welcome to Scenius Mexico: Your weekly newsletter on technology, innovation, and startups in Mexico.
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Follow The Money
FinTech Baubap secures US$ 120 million in debt
The microlending startup in Mexico has secured US$ 120 million in debt financing from SixPoint Capital Management. This capital will enhance Baubap's lending operations aimed at underserved borrowers, using its app-based service to provide quick microloans. Since its establishment in 2018, Baubap has grown to service half a million active loans monthly and plans to expand its customer base to 1.4 million this year. This latest funding round follows previous capital injections, including US$ 20 million from Park Cities Asset Management and US$3 million in seed funding from Grupo Grameen. CEO Roberto Salcedo views the financing as a means to support millions in Mexico, providing a viable alternative to more costly informal loans.
Sector: FinTech
Total raised to date: US$143 million
Founders: Roberto Salcedo
Investors: SixPoint Capital Management
YoFio closes a US$10 million round in a mix of debt and equity
YoFio is an instant credit app. Aimed at the underserved segment of microbusinesses, which constitutes about 60% of businesses in Mexico and plays a crucial role in job creation and economic growth, YoFio addresses the significant barriers to formal credit access. With US$8 million already granted in credits to over 3,500 active clients, YoFio plans to expand its credit portfolio to US$5 million by the end of 2024. The funding will enable YoFio to reach breakeven within the next 12 months, expand its offerings nationwide, grow its client base to 10,000, and form partnerships with major grocers, consumer goods companies, and fintechs serving this market segment.
Sector: FinTech
Total raised to date: US$10 million
Founders: Alberto Bonetti Frías, Óscar Javier Garavito Méndez, Víctor Valdés Bermúdez
Investors: Oikocredit, 500 Global, Innogen Capital, Cauris Finance
Startups News
SPAKIO and Xpats are partnering
SPAKIO and Xpats have announced a partnership aimed at assisting expatriates and digital nomads moving to Mexico, as the country that has become increasingly popular lately. SPAKIO is a startup that provides a one-stop shop for on-demand storage and logistics for private and corporate clients, while Xpats is a cross-border integrated financial platform designed to offer access to financial and non-financial products for expatriates and global remote workers. This alliance is set to address the storage needs of expatriates and remote workers, while facilitating their relocation process within Mexico.
Frubana closes its operations in Mexico
The startup has announced the cessation of its operations in Colombia and Mexico, attributing the decision to financial constraints, while choosing to continue its business exclusively in Brazil. This move is in response to a challenging environment that has impacted funding opportunities, with Frubana focusing its resources on Brazil, its largest market, generating 60% of its revenue.
VC - M&A News
Mexico's newest Venture Studio
Fundamental is a Venture Studio focused on social impact. It is establishing itself in Mexico to foster the creation and growth of socially purposed startups in the region. As one of the first entities of its kind in Mexico, Fundamental aims to launch startups that address challenges such as inequality, environmental degradation, and unemployment by supporting microbusinesses across Latin America. It plans to launch 10 new startups by 2028, boosting the economic and social potential of the region. This initiative is part of a broader effort to develop more Impact Tech startups and bring operational efficiency to microbusinesses in Latin America, promising a transformative impact on the region.
Tu Mejor Amigo has been acquired by Cuida Mi Mascota
With the goal of consolidating the pet services sector in Mexico and Latin America, Tu Mejor Amigo, a Pet Tech startup founded in early 2023, has been acquired by Cuida Mi Mascota for an undisclosed amount. As a result of the merger, Ignacio Zanotto will assume the role of Chief Product Officer at Cuida Mi Mascota, overseeing product, integration, and operations, while the future endeavors of the two other cofounders remain undecided.
Rest of the World
Chilean HealthTech Keirón continue its growth in Mexico
The startup recently closed a Seed-Extension funding round of US$1.7 million to continue its growth in Mexico. After establishing operations in Mexico 18 months ago to transform the digital landscape of laboratory networks and other health centers, Keirón now wants to boost its health CRM in Mexico. This CRM is designed to enhance patient care in hospitals, clinics, and laboratories across Latin America.
Belgium Niko is coming for the Mexican market
Leveraging a new US$3.3 million investment round, the startup wants to get into the Mexican market with its distinctive solar energy offerings for homes and small enterprises. Featuring a full spectrum of services spanning financing, installation, and maintenance, Niko employs AI and satellite tech to streamline the buying journey. Its introduction to Mexico, a country with vast solar potential, signals an ambitious bid to harness the region's untapped solar energy capabilities.
Economy
Mexico's FinTech scene is surging
At the start of 2024, Mexico's FinTech scene surged by 19%, making it the second-largest market for financial technology companies in Latin America. Mexico now boasts 773 fintechs, showcasing the sector's maturation and a consistent growth rate of 18.4% from 2019 to 2023. Finnovista predicts FinTechs in Mexico will see even higher revenues in 2024 than the previous years.
SoftBank is set to increase its investment in Latin American startups in 2024
According to Bloomberg, SoftBank is aiming to capitalize on the market's more realistic valuations after a significant correction. Despite a recent shift towards managing its existing portfolio due to capital market challenges, resulting in only a few new investments in 2023, SoftBank remains optimistic about the region. The firm's Latin America funds have committed US$7.8 billion, with a fair value of $6.3 billion as of the end of the year, indicating a positive outlook based on more reasonable valuation expectations and a robust entrepreneurial talent pool.
See you for the next edition. Have a question or any feedback? Just hit reply. I'd love to chat!
Arnaud