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Mexico's Klar raises $90 million in funding round led by General Atlantic

reuters.com · 06/09/2022 09:00
Mexico's Klar raises $90 million in funding round led by General Atlantic

By Valentine Hilaire

- Mexican fintech Klar raised $90 million in its latest funding round led by U.S. private equity firm General Atlantic, positioning it to enhance its platform and explore strategic acquisitions, its cofounder and chief executive said.

The start-up is targeting the roughly 70% of Mexicans who lack formal access to credit, seeking to lure them with loans starting at 200 pesos ($10.22), Stefan Moller told Reuters in a video interview.

Klar has advanced 1.8 billion pesos ($91.2 million) in credit lines during the last 12 months.

The company says 40% of its customers have no previous experience with online banking.

The fintech plans to spend $100 million over the next 24 months to boost its loan offerings and make savings accounts available.

Financial inclusion levels in Mexico have worsened since 2018 despite a burst of financial startups hoping to "bank the unbanked," official statistics show. nL2N2XG2MD

There are more fintechs, but many remain suspicious of the sector due to high fees and bureaucracy, Moller said.

"Mexican start-ups are in their first innings. They have really only started to grow and receive the appropriate funding to operate in the last three years," said Luis Cervantes, managing director and head of General Atlantic’s Mexico office, adding the country's fintechs are four or five years behind their Brazilian cohorts.

In a time of a decreased funding capital, only the strongest will survive and be able to gain ground, Cervantes said.

This is General Atlantic's second investment in Klar, Cervantes noted, reiterating his confidence in it and other Mexican companies in its portfolio such as payment unicorn Clip.

($1= 19.5729 Mexican pesos)

(Reporting by Valentine Hilaire; Editing by Christian Plumb and Chris Reese)