Ep. 80: SolarTech & FinTech Seed rounds, Nu Mexico goes cash, and more
Welcome to Scenius Mexico: Your weekly newsletter on technology, innovation, and startups in Mexico.
In this edition, we got the news on a SolarTech and a new FinTech seed rounds, Nu Mexico accepting cash deposit, MagicLog new AI solution, an Uruguayan and Colombian startups expanding to Mexico, Walmart Bait growth and WeWork success in Mexico.
Let’s dive in!
Follow The Money
Niko secures a US$ 3.3 million seed round
Niko is a solar installation startup addressing the country's underexploited solar power potential. In Mexico, despite abundant sunshine, solar power is significantly underutilized, with the country having only one-eighth of Germany's solar capacity, for example. The founders see a massive opportunity due to high electricity rates, easier permitting, and lower installation costs, alongside a fragmented market and inexperienced small installers. Niko aims to simplify the solar adoption process for residential and small commercial customers, offering no upfront costs, guaranteed utility bill savings, and a seamless customer experience. Despite challenges like long sales cycles and limited financing options, Niko is optimistic about its model, which profits from a portion of the utility bill savings, envisioning expansion into other home electrification projects. Apparently, the round was at a US$ 16 million post-money valuation (TechCrunch).
Sector: SolarTech
Total raised to date: US$3.3 million
Founders: Edoardo Dellepiane, Raffaele Sertorio
Investors: Picus Capital, 468 Capital
Grupago secures a US$ 4.3 million seed round
The FinTech startup will use the funding to provide credit solutions to small and medium-sized businesses (SMBs) in Latin America. Launched in October 2023, Grupago aims to fill the significant financing gap for SMBs in Mexico and the LATAM region, leveraging AI for credit assessments, group collateral for loan security, and a community-based distribution model. Focused initially on supporting women entrepreneurs in Mexico, the company introduced a digital platform inspired by Nobel laureate Muhammad Yunus’s group lending model, aiming to democratize financial services and promote financial inclusion within the micro-SMB sector in Latin America.
Sector: FinTech
Total raised to date: US$4.3 million
Founders: Uri Pomerantz
Investors: Deciens Capital, Precursor Ventures, Clocktower Ventures, Twine Ventures
Startups News
Nu Mexico Cash
Nubank has partnered with FinTech Arcus by Mastercard to launch a cash deposit network for its Nu account holders in Mexico, allowing them to deposit cash at over 700 Soriana stores across the country. This initiative is part of Nubank's commitment to financial inclusion and marks the evolution of Cuenta Nu, offering users a secure and convenient way to deposit up to $5,000 pesos per transaction without needing a physical card. Initially starting with a limited customer group, the service aims to expand the network of establishments for cash deposits while also enabling cash withdrawals at selected supermarkets and ATMs nationwide.
MagicLog new AI solution to audit supply chains
This SaaS solution operates on a monthly subscription platform based on annual transactions, aiming to modernize and digitalize customer experiences for logistics service providers by reducing operational costs and increasing customer retention and revenue. MagicLog is already active in many countries, and boasts over 4,000 active users. The Startup is developing features for data quality audits using AI and Machine Learning, with the first integrated version expected by the end of Q2 this year. Additionally, they are working on automating data extraction from emails and PDFs, with a prototype expected by Q1 2025.
Rest of the World
Uruguayan Prometeo introduces a new A2A payments solution in Mexico
Prometeo has introduced an account-to-account payments solution in the Mexican market, designed to facilitate direct, real-time bank transfers through a single API, eliminating intermediaries. This innovation comes as transfer payments saw a 71% increase in Latin America from 2021 to 2022, with similar systems like PIX and PSE achieving success in Brazil and Colombia, respectively. The solution, which is embedded directly into clients' digital channels like websites and apps, allows businesses to implement the system quickly without complex technical developments. Prometeo's launch in Mexico, where only about half of the population has a bank account, aims to enhance the financial transaction process by offering a secure, embedded payment solution that provides a superior user experience and real-time access to transaction data.
Colombian Kravata expands to Mexico
The startup is specializing in secure and efficient payment solutions for businesses leveraging blockchain technology. Kravata offers services including currency conversions to stablecoins and cross-border payments, aiming to address transaction infrastructure challenges within the region. Having processed US$215 million in transactions in its first year with 20 clients in Colombia, Kravata, backed by notable international funds, plans to meet the growing demand for comprehensive transaction solutions in Mexico, positioning itself for significant growth and tapping into new market opportunities.
Economy
Wallmart Bait is growing
Walmart owned Bait, a Mobile Virtual Network Operator (MVNO), added 3.8 million subscribers in just 6-months and reached a total of 11.8 million customers. This growth outpaced traditional telecommunication giants like Telcel, AT&T, and Telefonica, highlighting the need for a disruptive presence in the industry. Despite generating lower revenue per user and focusing primarily on the prepaid market, Bait has successfully leveraged the Walmart ecosystem to offer affordable connectivity in Mexico. Through initiatives like giving a free MVNO chip with purchases and promoting number portability, Bait aims to provide accessible telephony and internet services to a broader audience.
Mexico is WeWork's 4th most important market globally
Mexico is WeWork's 4th most important market globally and the leading one in LATAM. The infamous "startup", which occupies 260,000 square meters in Mexico's major cities (Mexico City, Monterrey, and Guadalajara), sees nearshoring as a key business driver, particularly in Monterrey due to its proximity to the U.S. Despite WeWork's financial restructuring in the U.S., the Latin American operations (supported by SoftBank LATAM Fund) continue to show growth and financial health, functioning almost like a franchise. Also, the NOM-37 regulation, promoting telework in Mexico, has also positively impacted the demand for WeWork's services in the country. And not forgetting Mexico's booming Digital Nomad scene to the mix.
See you for the next edition. Have a question or any feedback? Just hit reply. I'd love to chat!
Arnaud