Contxto – It’s that time of the year again! Another Mexican neobank has raised funding. 

According to a PR Newswire press release, Mexican mobile-only neobank, Stori, has concluded a US$10 million Series A2 round. A2? I swear I thought that was either an Audi or a steak sauce. Anyways, moving on. 

The investment was co-led by Bertelsmann Investments and Source Code Capital, while followed up on by its previous backer, Vision Plus Capital, from one of Alibaba’s co-founder. Pay attention to China’s future involvement in the region, particularly in AI-related matters.

Created no longer than two years ago, it has already raised a total of US$17 million. 

Reportedly, the company aims to increase its already existing big data and AI capabilities. They also plan to scale their workforce in order to reach 100,000 customers across Mexico. 

According to the press release, the company just launched its credit card in the country. Which is odd, since they had already announced the release on their social media accounts since December 2019. Along with this, is the fact that Stori has already issued over 2,000 credit cards within the first weeks of launch. We’re figuring this one out.

The company, co-founded by Marlene Garayzar and Manuel Medina, believes there are enormous market opportunities to serve over 70 million un- and underbanked people in Mexico.

Interestingly enough, the young company’s CEO isn’t among the initial founders, but is rather a financial professional with experience in companies such as Mastercard and Boston Consulting Group, Bin Chen.

UPDATE: Even though the press release never addresses in Bin Chen as a co-founder, nor is he in the site’s team page. It seems like, in fact, he is. We’ll clarify this with Stori’s founders, shortly.

“Almost two decades ago, a credit card saved me from financial difficulty and helped launch my career. Now we are making it our mission to give the same opportunities to tens of millions of hard-working and responsible Mexicans. In the last two years, we have developed a strong big data and AI-based platform, and built a fantastic Mexico team supported by global talent and resources. The stage is set to turbocharge our growth in platform, people, brand, and customer base, making a big impact on financial inclusion.”

– Bin Chen, Stori CEO

Bertelsmann Investments’ head of fintech, William Zhao agrees that there’s a huge opportunity within the Mexican market for financial technology to take over and help millions of consumers.

The neobank Stori so far

We all know the narrative surrounding Mexican neobanks. Less than 40 percent of the country’s population has a bank account, yet 72 percent already has a sweet Android or iPhone. So at first sight, it seems like there’s a clear arbitrage opportunity waiting for some ambitious tech entrepreneur to close the gap.

Oddly enough, though, the adoption of neobanks and challenger banks hasn’t grown as fast as one would initially think.

My hypothesis? Mexicans are deeply concerned about its financial security, and I don’t mean having a job.

I mean the actual physical security of their cash. Also, I would say people aren’t early adopters, most are late-majority, even laggards. Nevertheless, the market is big and a great majority of the population is mobile-first, digital-native millennials and centennials, so there’s definitely something tickly going on there.

Albo, Fondeadora, Weex (now Mibo), Flink, Klar, Cuenca, Stori, etc. I’m not even sure if I listed them all, but there are certainly many companies in the neobank and challenger bank market in Mexico. Yet, it doesn’t seem like there’s a frontrunner in terms of users yet. 

Take a look at Mexico’s wallet wave in this chart, courtesy of ALLVP: 

We’ll see.