Mexico FinTech News
Mercado Libre’s shares plunge as margins disappoint
Ecommerce and fintech giant Mercado Libre posted a weak set of 3Q24 results, with top-line growth in line with expectations, but much lower than expected profitability. The company’s operating margin nearly halved YoY to 10.5% from 20% last year, mostly driven by higher provisions and higher operating expenses, following a 77% increase in the total portfolio; according to the company, credit quality metrics remained stable QoQ. The stock plunged 16% on Thursday, before recovering some of those losses on Friday; it’s still up 19% YTD. Mercado Libre has a long history of investing successfully and heavily for future profitable growth, a strategy that has made it Latin America’s largest company, and 3Q24 earnings may well turn out to be just a bump (just as it soon shook off initially disappointing results in 4Q23, 1Q20, 4Q18, 3Q14, 2Q12, 1Q11). The increase in provisions reflects the recent rapid growth in its credit card portfolio, as Mercado Pago evolves to becoming a mainstream credit and payments FinTech, competing head to head with Nu, among others. That said, FX-adjusted credit card gross portfolio softened in Mexico this quarter, perhaps suggesting underwriting standards had become too loose after rapid recent growth. On operating expenses, MELI is expanding fulfillment to smaller cities after the huge success of fulfillment investment in bigger cities in the past five years.
Bloomberg, 11/06/24, Daniel Cancel: MercadoLibre Loses $17 Billion of Market Value on Profit Miss.
Plata issues unsecured bond, ending NBFI’s three-year drought
Credit card fintech Plata Card raised US$55 mn in senior unsecured bonds due 2026 through a private placement program led by Scotiabank. While not a particularly large amount, the transaction is notable in that it represented one of the first senior unsecured issuances for a Mexican non-bank financial institution (NBFI) in the domestic financial system since 2021, when the sector was mired in scandal following the bankruptcies of Credito Real, Unifin and others. (In May 2024, Plata Card secured a USD 100 million credit facility from Fasanara Capital Ltd, a global asset manager specializing in fintech lending.) Plata, backed by the PE fund Baring Vostok, is led by former Tinkoff Bank executives from Russia and due to savvy digital marketing and high-quality data-driven underwriting, has become a leading upstart credit card player in the Mexican market.
Scotiabank, 11/07/24: LinkedIn Post.
Fintech in Mexico: Overbanking and Barriers to True Financial Inclusion
While fintech services have significantly expanded in Mexico, experts warn that this growth has not yet achieved inclusive reach. The rapid spread of fintech offerings in urban centers has created “overbanking,” where financial services are plentiful but fail to address the unique needs of underserved populations. Meanwhile, rural regions and vulnerable communities continue to face obstacles, from cultural limitations to technological barriers, that restrict their access to these advancements. Speaking at a press conference hosted by Cofece, experts agreed the issue requires the federal government’s collaboration with private players.
Forbes México, 11/07/24, Diego Aguilar: Fintech in Mexico: Overbanking and Barriers to True Financial Inclusion.
Claudia Sheinbaum Meets with Founder and CEO of Mercado Libre
Mexican President Claudia Sheinbaum met with Marcos Galperin, founder and CEO of Mercado Libre, to discuss the company’s investment plans in Mexico. Mercado Libre has announced a $2.45 billion dollar investment in the country, focusing on technological innovation and the expansion of its logistics network. Marcelo Ebrard noted that Mercado Libre processes around one million daily transactions and facilitates sales for half a million businesses, 80% of which are small and medium-sized enterprises (SMEs).
Ahora Tabasco, 11/07/24, Staff: Claudia Sheinbaum Meets with Founder and CEO of Mercado Libre.
Nu México Expands Deposit Network for Cuenta Nu through Partnership with FINABIEN and Arcus by Mastercard
Nu México has broadened its deposit network for Cuenta Nu by partnering with Financiera para el Bienestar (FINABIEN) and Arcus by Mastercard. This collaboration enables customers to deposit and, soon, withdraw cash at FINABIEN’s 1,700 branches nationwide.
Latam Fintech Hub, 11/05/24, Nubank: Nu México Expands Deposit Network for Cuenta Nu through Partnership with FINABIEN and Arcus by Mastercard.
Mexican Fintech Bravo Secures $27 Million Dollars in Funding to Drive Growth
Mexican fintech Bravo, specializing in debt relief through credit, has secured $27 million dollars in funding. Led by BBVA Spark, this investment will support Bravo’s expansion in Mexico and Spain. Since entering the Mexican market in 2009, Bravo has facilitated the settlement of over 380,000 debts, valued at just over a billion dollars.
Marketing4eCommerce México, 11/07/24, Juan Rodriguez: Mexican Fintech Bravo Secures $27 Million in Funding to Drive Growth.
Fairplay Secures $35 Million Dollars Financing from BBVA Spark to Boost Mexican SMEs
Fairplay, a leading platform offering flexible working capital solutions, has obtained a $35 million dollar credit line, also from BBVA Spark, to support the growth of small and medium-sized enterprises (SMEs) in Mexico.
Latam Fintech Hub, 11/07/24, BBVA Newsroom: Fintech Fairplay receives $35M financing from BBVA Spark to boost Mexican SMEs.
Klar Aims for IPO by Late 2026
Mexican fintech company Klar plans to pursue an initial public offering (IPO) by the end of 2026, driven by its growth trajectory. The firm has been expanding its financial services portfolio, including credit and payment solutions, to cater to the underbanked population in Mexico.
Reforma, 11/01/24, Bloomberg: Klar Aims for IPO by Late 2026.
Stori Enhances Security Amid Rising Cyberattacks
In response to a significant increase in cyberattacks, with organizations in Mexico facing an average of 3,124 weekly attacks—a 78% annual rise—Stori has intensified its security measures. The company has achieved Payment Card Industry (PCI) certification, ensuring compliance with high security standards. This certification mandates regular independent reviews of Stori’s security processes, reinforcing its commitment to safeguarding user data and maintaining robust cybersecurity protocols.
Reforma, 11/07/24, Charlene Domínguez: Stori Enhances Security Amid Rising Cyberattacks.
Belvo announces 2mn transaction milestone
Belvo, a financial technology company, announced it has processed over 2 million recurring transactions since enabling bank debits in January 2024, totaling 1.9 billion pesos by October. By 2025, it expects to reach 4 million transactions, aiming to handle over 25 million recurring payments. This surge reflects demand for automated payment solutions, as many digital payment options lack easy recurring billing features. Leveraging APIs, Belvo streamlines bank connections, fostering growth in sectors like fintech, subscriptions, and telecom.
El Economista, 11/08/2024, Sebastián Estrada: Belvo expects great demand for recurring charges.
LatAm FinTech News
Oxpay Secures $3.5 Million Dollar Investment from SRM Ventures
Brazilian fintech Oxpay has raised $3.5 million dollar from SRM Ventures, the venture capital arm of SRM Asset. The funds will be used to acquire new clients and aim to increase the total payment volume (TPV) of its digital account by tenfold by the end of next year. Currently, Oxpay collaborates with 36 carriers and has over 10,000 registered drivers, serving leading companies and marketplaces in Brazil. Founded in 2021, Oxpay offers a digital account for transportation companies and drivers, including services such as receivables anticipation, contract signing, invoice issuance, and payments.
LatamList, 11/06/24, Matheus Tomé: Oxpay raises $3.5M from SRM Ventures.
Stay Secures $2.6 Million Dollars to Enhance Private Pension Services in Brazil
Brazilian fintech Stay has raised $2.6 million dollars in a seed funding round led by Maya Capital and Better Tomorrow Ventures. Stay collaborates with small and medium-sized enterprises to provide tailored retirement plans for employees, aiming to improve benefits and boost employee retention. The company serves clients such as Cescon Barrieu, Leve Saúde, and Mölnlycke. Stay plans to double its workforce by the end of 2024 and increase its client base tenfold.
LatamList, 11/06/24, Adriana Villasana: Stay raises $2.6M to expand private pension offerings in Brazil.
Global FinTech News
Kaizen Secures £42 Million Growth Investment from Guidepost Growth Equity
Kaizen, a regulatory reporting and data management provider, has received a £42 million growth investment from Guidepost Growth Equity. This funding will help Kaizen expand into new markets and enhance its suite of compliance tools, meeting rising demand in the financial sector. CEO Dario Crispini highlighted the partnership’s potential to accelerate growth and innovation as Kaizen continues to strengthen its offerings.
FF News, 11/06/24, Staff: Kaizen secures £42 million growth investment from Guidepost Growth Equity.
Sunbit Secures $355 Million Dolllars Debt Warehouse Facility Led by J.P. Morgan, Mizuho Bank, and Waterfall Asset Management
Sunbit, a fintech focused on everyday financing solutions, has secured a $355 million debt warehouse facility led by J.P. Morgan, Mizuho Bank Ltd., and Waterfall Asset Management. This marks Sunbit’s second major facility of 2024, following a $310 million deal with Citi and Ares Management earlier in the year. CEO Arad Levertov emphasized that the facility enables the company to reach more consumers with customer-focused solutions.
FF News, 11/05/24, Staff: Sunbit secures $355 million debt warehouse facility led by J.P. Morgan, Mizuho Bank, and Waterfall Asset Management.
Moneybox Climbs Tech Rankings After 1,399% Revenue Surge
Digital wealth management platform Moneybox reported a 1,399% revenue growth over the last three years, earning the 23rd spot in Deloitte’s UK Technology Fast 50 ranking. Moneybox now oversees more than £10 billion in assets under administration (AUA), with a 46% increase in average AUA per customer. In Q3 2024, the platform saw £615 million in net deposits, marking a 143% rise from the previous year, and added 72,000 new customers. Co-Founder and Executive Chair Ben Stanway credits their proprietary technology and customer-focused model for this impressive growth, aiming to make wealth creation accessible.
Fintech Magazine, 11/08/24, Staff: Fintech Moneybox climbs tech rankings after 1,399% surge.
Crypto Prices Surge Following U.S. Election Results
In the wake of the recent U.S. presidential election, the cryptocurrency market has experienced a significant surge. Bitcoin’s price has risen by approximately 7%, nearing the $75,000 mark, while Ether has climbed 9% to around $2,650. This uptick is largely attributed to the anticipation of more crypto-friendly policies under the new administration. Publicly traded companies in the crypto sector have also benefited, with Coinbase shares increasing by 24% in midday trading. Despite this positive momentum, venture capital investment in Web3 startups remains subdued, with only $1.3 billion dollars invested across 233 deals so far this year, indicating a cautious approach from investors.
Crunchbase News, 11/06/24, Chris Metinko: Crypto Prices Jump, Will Funding Follow?
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