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Contxto – Mexican crowdfunding Play Business recently raised US$500,000 to augment its collective funding platform for startups. National broadcaster Regional, whose main subsidiary is Banregio, directed the investment.
Moving forward, the crowdfunding startup intends to expand more throughout Mexico. At the same time, it will strategically align itself with Banregio to continue implementing this equity funding scheme.
Funding as a crowd
As Mexico’s first crowdfunding platform, according to Entrepreneur, Play Business has processed over 23,800 investments among more than 100 companies with high-growth potential since its 2014 founding.
Founded by Joan Segura, Fernanda de Velasco and Marc Oyamburu, the crowdfunding website allows investors to make monthly equity contributions as low as MXN$800 (approximately US$40), according to its website.
Whether you’re a rookie investor or a seasoned veteran, this is a great method of expanding your portfolio and purchasing company shares. If you’re lucky, you may even turn a profit. All the while, these contributions can make a world of a difference for startups struggling to make ends meet.
“Play Business helped us take our project to the next level,” said Aldo Uribe, founder of Tumbiko, an artisanal jewelry company based in Mexico City that works with local communities. “Today, only after two years, we have reactivated the economy in Taxco and helped more than 300 families in the region.”
According to reports, around 30 percent of initial investments come from friends and family associated with the startup.
Part of Play Business’ monetization scheme is a 5 percent commission for every financial contribution. However, that’s only if the startup reaches its fundraising target. Investors earn revenue as the startup gradually increases its value.
In the event that investors reach a 4 percent stake in the company, then they become a bonafide partner. With this, partners can then sell their portion inside or outside of Play Businesses’ network.
To facilitate this, Play Business provides private contracts between startups and investors. This ensures that investors will either receive profit shares or accept the project losses.
Based on Play Business’ website, the company has also adhered to Mexico’s groundbreaking fintech legislation. So far, it has participated in various discussion groups and received authorization to function under the law’s Eighth Transitory Article.
To this day, it continues to pursue the legal authorization to operate as a collective financing institute in Mexico.