Nexu, the Mexican fintech that offers a financing platform for people looking to buy a car, has secured a Series B investment round of USD$20 million. This capital injection will be used to empower the startup.
Valor Capital led the investment round, with participation from FinTech Collective, Endeavor Catalyst, Altos Ventures, Wollef, Squareone, Clocktower Ventures, Gilgamesh Ventures, FJ Labs, Ivernet, and Capem.
Nexu also secured a line of credit from HSBC, although the amount was not disclosed. The fintech has raised a total of USD$53 million in previous financings.
This newly acquired capital will be used to expand its presence in the Mexican market and to enhance and diversify its financing services.
Nexu has developed an effective solution for car buyers, providing them with an immediate result regarding the financing they seek to acquire a vehicle.
This Mexican fintech works directly with automotive dealerships to offer financing at the point of sale, which increases conversion rates and access to buyers who have not been considered or approved previously.
In contrast to the United States, where financing accounts for 80% of new car sales and 40% of used cars, in Mexico, obtaining credit is challenging: less than 60% of new vehicles and 2% of used vehicles are financed.
The lack of financing options is partly due to low approval rates by traditional banks and an outdated application process.
“When you apply for financing at a dealership in Mexico, you must wait an average of three days to receive a response,” explains Abdon Nacif, co-CEO of Nexu.
Thanks to their proprietary risk algorithm, Nexu claims they have the ability to approve more than twice as many buyers as traditional banks.
“We have created our own credit scoring based on public and private data,” says Fernando Gómez Arriola, co-CEO of Nexu.
With this investment and their current platform, Nexu has the potential to completely change the auto financing ecosystem in Mexico</strong, representing significant competition and a challenge to traditional banks while digitizing a sector that has lagged.
