Don’t worry, we’re talking about:
Spanish (Spanish), too much!
Contxto – FinTech Creze announced that it recently closed MXN $ 265 million (approx. $ 12 million) with anonymous Mexican investors.
The funds will be used to update its lending platform as well as “whatever comes next”. I’m paraphrasing a bit but they said that:
“We are proud to announce this investment which will allow us to better face any eventuality arising from the current crisis as well as to promote the continuous innovation of our platform and the acquisition of clients to achieve our goal of modernizing the bank. SMEs in Mexico. Says Creze co-founder Diego Creel.
And by “innovation”, the startup intends to update its risk analysis approach so that loan applications can be processed more quickly and funds transferred to the company within three days.
Lend fintech finesse for the summer
Lending fintechs have garnered the attention of the media (including us) over the past two months.
Equity rounds, debt financing rounds, mergers and acquisitions in various formats, everything was done and announced within the same timeframe.
In June alone, BizCapital closed $ 12 million in equity, ePesos announced funding of $ 21 million, while UK firm Greensill bought Colombian Omni Latam.
In July, Silicon Valley Bank closed a $ 30 million debt fund for startups. Likewise, Brazilian Liber Capital bought Adianta to extend its loans to accounts receivable departments.
With so much “good news” does that mean that fintech lending is generally easy for the next couple of months?
I would say no.
It’s not just gumballs and rainbows
One thing all startups and investors seem to agree on is that they want to help businesses cope with economic uncertainty by using technology. They also stress that they do not exclude others like the banks did.
Most use the narrative “bringing financial inclusion to Latin America, yada, yada, yada”.
Which (in theory) is awesome.
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But from a borrower’s perspective, I’m concerned about the interest rates fintechs may charge. Moreover, as businesses themselves, startups will not openly grant loans to anybody. Same if they have the technology on their side to assess other factors.
From a lender’s perspective, I don’t think things look too bright for fintechs that extend credit to individuals. Mexican yotepresto.com acknowledged that, given the circumstances, it could slow the number of loans it grants.
Meanwhile, Kueski announced layoffs in April to keep operations afloat.
Either way, B2B fintechs that target more mature companies should do better, as they’re a less risky bet.
Damn, I’m starting to sound like a traditional bank …
Well, either you die a hero or you see yourself becoming the villain.
Related Articles: Tech and startups from Mexico!
-ML
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