Ep. 82: Big Tech companies are making the news - Uber, Shein, Revolut, Konfio
Welcome to Scenius Mexico: Your weekly newsletter on technology, innovation, and startups in Mexico.
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Follow The Money
Crezes raises US$ 750,000 Pre-Seed round
Crezes provides AI-driven location-based insights, such as pedestrian and vehicle flow, visit frequency, and demographic analysis, by sourcing aggregated and anonymous data from mobile devices in compliance with privacy policies. The data allows companies to identify new markets, optimize location selection, and boost strategic decision-making, addressing the challenge of costly new market entries or store openings without reliable data support.
Sector: Data - Analytics
Total raised to date: US$0.75 million
Founders: David Trujillo, Santiago Moreno
Investors: Maya Capital
Startups News
Uber freezes its FinTech plans in Mexico
Uber has paused its FinTech ventures in Mexico, despite obtaining a FinTech license for an electronic payment funds institution in May, which would have enabled it to launch a digital wallet and debit card. The reasons for this decision remain unspecified, but it might be due to a lack of available engineering resources or an unclear ROI, as pointed by my friend Oscar (ex-Uber). In contrast, competitors inDrive and DiDi are doubling down on their financial services. InDrive has introduced loan and credit card services for drivers through partnerships with companies like R2, Galileo, and Mastercard, boosting driver retention and revenue generation. DiDi has expanded its financial offerings to all Mexicans with the DiDi Finanzas app, disbursing over 5 million loans and handling over 2 million transactions through DiDi Pay. DiDi also launched a credit card last year and is pursuing a super-app strategy, integrating various daily services into one platform.
Shein expands its operations in Mexico
The Chinese fast-fashion giant is expanding its operations in Mexico not by building a factory but by outsourcing production to local manufacturers. Marcelo Claure, the global vice president of Shein, stated that the company would provide technology and production guidelines to Mexican clothing manufacturers, guiding them on where to purchase materials and how to produce for Shein. This approach has already been implemented in Brazil and Turkey. The expansion strategy aligns with Shein’s goal to be closer to its consumers, particularly in markets like Mexico and the United States, where Shein is among the top five countries in sales volume. The company currently operates a distribution center in Mexico and plans to hire more staff, open additional offices, and expand further.
Revolut plans to invest over US$ 100 million in Mexico
The London-based FinTech plans to invest over US$ 100 million in Mexico in 2024 following its recent authorization to operate as a full banking institution in the country, focusing on the remittance market. CEO for Mexico, Juan Guerra, stated that the investment would primarily support liquidity ratios and staffing. Revolut, which serves over 40 million customers across more than 150 countries, aims to rapidly introduce various banking products in Mexico, including accounts and international transfers, and plans to bring all its European products to the Mexican market.
FinTech Konfío apply for a banking license
The Mexican unicorn has announced plans to apply for a banking license to boost its financial services to small and medium-sized enterprises (SMEs) in Mexico. This move aims to expand its offerings to include corporate and personal deposit accounts, enabling it to serve a larger client base and provide more integrated services. Since its inception in 2014, Konfío has worked with approximately 75,000 businesses across the country. By obtaining a banking license, Konfío seeks to leverage its market position to better meet the changing financial needs of its customers and accelerate its credit services to SMEs. Wish them luck.
VC - M&A News
Former PayPal CEO joins Valor Capital
Dan Schulman has joined Valor Capital as a managing partner, bringing his experience at PayPal, where he significantly expanded the company's payment volume. Valor Capital, known for launching the first U.S. and Latin American cross-border venture fund in 2011, sees Schulman's appointment as pivotal at a time when the FinTech sector's focus is increasingly shifting towards Latin American markets like Mexico and Brazil. These two countries have high internet and smartphone usage, representing significant growth opportunities for the sector. Schulman's previous involvement with Latin America includes driving PayPal’s US$ 750 million investments in MercadoLibre, underlining his commitment and belief in the region's potential.
Rest of the World
Chilean Breik is landing to Mexico
The startup that specializes in optimizing work shift management through its web platform, has initiated a pilot program in Mexico as part of its international expansion. Breik's platform is used by companies with high employee turnover, providing customized solutions that enhance shift management efficiency. The company's expansion strategy includes solidifying the success of its Mexican pilot in 2024, aiming to capture new clients and establish strategic partnerships to further strengthen its presence in the country.
Chilean Toku raised US$ 9.3 million to accelerate in Mexico
Toku, a FinTech focusing on streamlining recurring payment collection, secured a US$ 9.3 million Series A funding round led by Gradient Ventures and Wollef to fuel its expansion in Latin America, including significant development in Mexico. The company, which began its operations in Mexico in 2023 following a US$7 million seed round, plans to use the funds to hire additional staff and develop new products specifically for the Mexican market. Toku's platform offers a comprehensive solution for managing the entire collection cycle, combining software with personalized consulting to enhance and automate collections efficiently and at lower costs.
Economy
Inflation in Mexico reached 4.42% in March
Inflation in Mexico reached 4.42% by the end of March, slightly below the expected 4.5%, according to the National Institute of Statistics and Geography (INEGI). The rise was driven by significant increases in the costs of services, food, and goods. Services, in particular, saw a substantial increase with a 0.69% monthly rise, culminating in a yearly rate of 5.37%. Food prices also climbed, contributing to a 5.01% annual inflation rate for this category. Noteworthy price surges included air transportation, which rose by 28.35% in March, and various food items such as lettuce, cabbage, and serrano chili. Despite these increases, core inflation saw a slight decline to 4.55%, the lowest since May 2021. Energy prices and government-authorized tariffs also rose moderately, further influencing the overall inflationary landscape in Mexico.
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See you for the next edition. Have a question or any feedback? Just hit reply. I'd love to chat!
Arnaud