Klar, the Mexican fintech, has secured a credit line of USD $100 million to expand its operations in Mexico, a nation with one of the lowest banking rates in the region.
With a population surpassing 128 million, Mexico confronts a 63% unbanked rate. Of all the transactions, 21% are in cash, while 44% are conducted via cards. There are 61 ATMs for every 100,000 adults, and the country’s internet penetration remains relatively low at only 66%. Without operating as a traditional bank, Klar boasts over two million users on its digital platform.
This financing comes from Victory Park Capital (VPC), a U.S.-based investment firm. Stefan Moller, Klar’s CEO, conveyed to Reuters the fintech’s ambition to further expand its offerings, with potential loans reaching up to MX $40,000.
In the face of challenges besetting the fintech ecosystem, aggravated by macroeconomic events that affected the region in 2022, Klar has stood out as a shining exception. According to a study by GP Bullhound titled “The Evolution of the Latin American Technological Ecosystem and Investments (2010-2022)”, despite setting an investment record in 2021, overall funding for fintech waned in 2022. Nonetheless, Klar had already amassed USD$90 million in financing by June of the preceding year.
Global venture capital investment 2023. (Source: SB Insights)
Global venture capital investment 2023. (Source: SB Insights)
" data-medium-file="https://i0.wp.com/contxto.com/wp-content/uploads/2023/08/Inversion-venture-capital-global-2023.png?fit=300%2C170&ssl=1" data-large-file="https://i0.wp.com/contxto.com/wp-content/uploads/2023/08/Inversion-venture-capital-global-2023.png?fit=1024%2C582&ssl=1" decoding="async" >Data from CB Insights and S&P Global Market Intelligence indicate that global fintech funding dipped to its lowest since 2017 in the second quarter of 2023. Yet, Latin America and the Caribbean garnered investments amounting to USD $500 million, marking a 150% surge from the prior quarter.
Furthermore, the report on the State of Fintech in the second quarter of 2023, produced by TechCrunch and CB Insights, corroborated this figure. The Association for Private Capital Investment in Latin America (LAVCA) underscored the fintech sector as the prime recipient of venture capital investments in 2022.
elationship of clients between main banks and neobanks.
elationship of clients between main banks and neobanks. (Cocktail)
" data-medium-file="https://i0.wp.com/contxto.com/wp-content/uploads/2023/08/Estudio-banco-Cocktail2.jpg?fit=300%2C152&ssl=1" data-large-file="https://i0.wp.com/contxto.com/wp-content/uploads/2023/08/Estudio-banco-Cocktail2.jpg?fit=600%2C304&ssl=1" decoding="async" >In this backdrop, Klar stands out as a pivotal player in the digital financial revolution in both Mexico and Latin America. Its chief competitive edge is its adeptness in analyzing and leveraging user data to tailor services. The Latin American fintech ecosystem persists in its evolution, with entities like Klar exemplifying the potential and resilience of this sector in the region.
