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This story originally appeared at high level
By Antonio Sandoval
Financial inclusion has become the flag of the fintech sector in Mexico, which has not only discovered a large niche for business, but is also aware that the country’s conditions in this area must change once and for all from the traditional bank.
With the impetus of technology, the options grow and grow, but in this context there are some cases that are striking for the level of investments made, for a differentiated offer and for the prestige of its first-class business partners.
Clear It is a Suigéneris case that has been noticed from birth in Mexico and the world for its business model that allowed it to raise a very important amount of resources with which it presented a disruptive product to the market and the demand exponentially increased Achieve a first round of capitalization in record time.
“The data seems incredible, but 60 percent of the Mexican population doesn’t have access to a bank account by mid-2020. There are more cell phones than people and a large percentage of the population depends on ancient credit practices, according to the famous usurer. The question is, why don’t people have a bank account? That makes no sense, ”said Daniel Autrique, co-founder and CFO of Klar, in an interview with High Level.
“We are a 100 percent digital alternative. We realized that the traditional operating model of a bank makes it very difficult to involve certain populations and decide historically to let them out of the financial system; In addition, there is a significant phenomenonPeople are already digitizing in their daily life, but they lack digitization in their financial life, which leads us to several paradoxes because, for example, when someone earns credit, it turns out that often they cannot get it because they have no financial history so that many are excluded from the system for life for this simple fact. That has to change, ”explained Autrique.
Faced with a scenario like the previous one, Klar was born as a real alternative to financial inclusion with 100% digital operations through an application that initially opened a debit account that would serve as a reference for a subsequent line of credit.
Klar’s business quickly found an echo in the Mexican fintech ecosystem and in the increasingly digitized clientele of financial service providers. The company only started operations last year In less than 12 months, the company already has just over 200,000 customers and has placed more than 25,000 lines of credit.
As mentioned earlier, their operations are not traditional. In fact, at Klar, they advocate new methods of evaluating customers. This also means that they put aside so-called “archaic systems” such as the Credit Bureau.
Credit profile with new standards
When a customer decides to purchase the Klar debit card, they first discover that the plastic is priceless and that there are no hidden additional costs. He also receives between 1 and 5 percent of his total shopping amount every month, which is the first step.
Your behavior with the debit card is crucial to the next disruptive product that Klar is offering: credit.
“Based on the history of your debit card, we determine that with certain spending behavior, you are someone who can pay us a credit;; This is very different from the way traditional banks rate customers for lending. We believe that office-based credit analysis shows a photo of the past which is not always reliable and leaves out many aspects of the client that are used to assess their current financial situation. That is why we do not grant loans. We even consider consulting the credit bureau, it is not crucial, ”says Daniel Autrique.
These novel criteria, which were also successful because, despite the context of recent months in the country, Klar tripled its customer base in the pandemic and its crime rates practically non-existent, caught the attention of mutual funds from a Start.
Successful capitalization round
When Klar was born, Klar achieved an unusual starting value of $ 57 million (more than 1,100 million pesos) in a first round of capitalization (seed capital) led by Quona Capital with the participation of Santander Innoventures and other multinational investors.
The success and confidence in the business model are so great that the company recently completed an additional round of investments called Series A.that raised $ 15 millionAlso, in a process led by Prosus (formerly known as Naspers Ventures), one of the world’s largest mutual funds in startups and technology, it is the first time that this fund has invested in a Mexican startup and broadly in any sector. Overall, the company has raised $ 72 million in debt and equity since it started operations a little less than a year ago.
The resources of the Series A investment will serve to consolidate the technological operation, as Klar also differs in this: “We have a solid team of more than 60 high-ranking engineers of various nationalities, whose headquarters are in Berlin. The German capital is currently considered the Silicon Valley of the fintech sector worldwide. Due to their high standards and constant innovations, we largely carry out our technological development there, ”said the company’s CFO.
Another part of the resources will be invested in the company’s operations in Mexico, the only country in which the company has operated and in which You will stay focused for a long time. “The challenge that Mexico presents because of the size of the market and the opportunities is so great that we will work on it for a while, for the moment when it is and will be our project.” explains Daniel Autrique.
And the fact is that Mexico presents so many opportunities for the sector that startups from other latitudes have already landed in the country to get a piece of the market. End of September, eThe Argentine digital banking company Ualá announced the expansion of its operations in Mexico after announcing last year that the company would double its size after receiving millions of new investments from Tencent Holdings and SoftBank Group Corp, the Japanese tech investment giant.
Ualá will offer a Mastercard in Mexico for physical and online purchases, cash withdrawals at ATMs, and sending and receiving payments, the company reported.
In order to venture and innovate it is necessary to know the market in which the project or projects are to be developed. Autrique has extensive experience in transnational companies in the financial sector. These experiences led to Klar, whose main goal is to bring the benefits of the banking system into the company. Millions of Mexicans who have traditionally been excluded, it was possible in this short period of time to consolidate a world-class neo bank that was 100 percent owned the bulk of the Mexican population is concentrated and an entirely different offering of credit from traditional banking provides a financial inclusion effort with results for the person living in Mexico.