Ep. 89: Kavak offering tokenized debt
FinTech Colors Seed round, Bitso Business growth, NuBank new acquisition, and more.
Welcome to Scenius Mexico: Your weekly newsletter on technology, innovation, and startups in Mexico.
Follow The Money
FinTech Colors raises US$ 1.2 million Seed round
Colors is a startup focused on providing exclusive financial services to the LGTBIQ+ community. With over 7.6 million LGTBIQ+ individuals in Mexico, contributing about US$ 80 billion to the national GDP, economic inequality remains a significant challenge. Colors aims to bridge this financial gap through its financial entity, Bold Moves, by facilitating access to credit and building credit histories, thus improving the financial status of its users. The startup offers more than just a credit card; it provides a personalized Credit Builder in its app, rewards for timely payments, and connects users to tailored offers and services.
Sector: FinTech
Total raised to date: US$1.2 million
Founders: Ramón Martínez
Investors: XY Booster
Kavak to offer tokenized debt in Brazil
Kavak, the Mexican unicorn in the used-car industry, has initiated the issuance of tokenized debt to fund its operations in the Brazilian automotive market. The startup has already tokenized nearly US$ 1 million in commercial notes through Liqi, a brazilian tokenization platform, and plans to raise up to US$ 5 million. This innovative funding strategy, offering a 5.5% APY with a 12-month term, will be secured by Kavak’s inventory of cars. Daniel Coquieri, CEO of Liqi, noted that tokenized debt can reduce financial costs of issuance by 60% compared to traditional methods, thanks to reduced infrastructure and intermediary involvement.
Sector: Marketplace
Founders: Carlos Garcia, Loreanne Garcia, Roger Laughlin Carvallo
Startups News
Bitso Business grew 187% y-o-y in Q1 24
Bitso Business, the B2B division of the cryptocurrency exchange Bitso, which provides infrastructure for cross-border payments, experienced a 187% year-over-year growth in the first quarter of 2024. The division now handles over 10% of the total remittance volume between Mexico and the United States and serves global companies transacting in the U.S., Argentina, Mexico, Brazil, and Colombia. Using blockchain technology, Bitso Business enables instant, lower-cost international payments, benefiting sectors such as e-commerce, over-the-counter trading, and gaming through a unified API that integrates with local banking systems. The platform is increasingly used by companies needing high liquidity and fast settlement times, and by those requiring integration across multiple countries simultaneously. Imran Ahmad, the newly appointed general manager, aims to make Bitso Business the primary choice for cross-border payments in Latin America.
Mercado Pago increased its annual yield rate
Mercado Pago, in partnership with Grupo Bursátil Mexicano (GBM), has increased its annual yield rate to 15% on daily earnings for user digital accounts, up from the previous 10.4%. This move, effective this month, positions Mercado Pago competitively in Mexico's ongoing rate war and follows a recent rate cut by Nu México to 14.5%. The initiative aims to encourage savings among Mexicans, capitalizing on the underbanked population in the country. With plans to apply for a banking license, Mercado Pago intends to make this high-yield savings product accessible to the masses, not just large investors, enhancing its appeal and fostering financial inclusion.
VC - M&A News
Nubank has acquired AI-for-banks Hyperplane
Hyperplane is a San Francisco-based startup launched in 2022 specializing in enabling banks to train their models for risk, collections, and marketing tools. This move is part of Nubank's ongoing strategy to enhance its AI capabilities and offer personalized financial services. The acquisition price was not disclosed but it is happening just 7 months after Hyperlane announced a US$ 6 million seed round.
Rest of the World
Argentine traveltech Outtrip lands in Mexico
The traveltech startup has launched operations in Mexico, anticipating business opportunities exceeding US$ 500,000 in its first year. Outtrip has formed a strategic alliance with ATMEX (Adventure Travel México) which counts a network of over 12,000 professionals. This partnership is part of Outtrip's efforts to digitalize adventure tourism offerings in Mexico. ATMEX will utilize Outtrip’s technology for its new online B2B2BC marketplace and Outtrip will provide its reservation management system, Outtrip Manager, to local adventure service providers.
Mexican FinTechs expand to Colombia
Mexican fintechs are expanding robustly in Latin America, especially in Colombia, where they account for 29% of the 169 foreign fintech startups operating there, according to a report by Finnovista. Alexis Nickin Gaxiola, a sector expert, notes that their adaptability and advanced technology have been key to their acceptance and growth. These firms have introduced innovations like mobile payment applications and peer-to-peer lending platforms, utilizing digitalization to provide accessible and efficient financial products. This expansion is supported by strategic alliances with local institutions, helping these fintechs comply with regulations and adapt to local contexts, enhancing user trust and credibility. Nickin Gaxiola highlights the role of these firms in promoting financial inclusion and foresees continued growth and integration of their technologies in the region's daily life.
See you for the next edition. Have a question or any feedback? Just hit reply. I'd love to chat!
Arnaud