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This "Neo Financial institution" tripled its clients within the pandemic (and with out utilizing the credit score bureau)

22, 2020

8 min read

This article has been translated from our Spanish edition using AI technologies. Errors can occur due to this process.

This story originally appeared on Alto Nivel

By Antonio Sandoval

Financial inclusion has become the flag of the fintech sector in Mexico, which has not only discovered a large niche for business, but is also aware that the country's conditions in this space must change once and for all from the traditional model bank.

With the impetus of technology, the options grow and grow, but in this context there are some cases that are striking for the level of investments made, for a differentiated offer and for the prestige of its first-class business partners.

Clear is a suigéneris case, from birth it has attracted attention in Mexico and in the world for its business model that allowed it to raise a very important amount of resources with which it presented to the market a disruptive product that exponentially increases the demand also increased a first round of capitalization in record time.

“The data seems incredible, but 60 percent of the Mexican population won't have access to a bank account by mid-2020. There are more cell phones than people, and a large percentage of the population depends on ancient credit practices, the famous usurers. The question is, why don't people have a bank account? That doesn't make sense, ”said Daniel Autrique, co-founder and Chief Financial Officer (CFO) of Klar, in an interview with High Level.

“We are a 100 percent digital alternative. We recognized that the traditional operating model of a bank makes it very difficult to involve certain populations and historically they choose to let them out of the financial system; In addition, there is a significant phenomenon People are already digitizing in their daily life, but they need to digitize in their financial life, which leads us to several paradoxes because, for example, when someone earns credit, it turns out that often they can't get it because they don't have a financial history, so that many are excluded from the system for life for this simple fact. That has to change, ”explained Autrique.

Faced with a scenario like the previous one, Klar was born as a real alternative to financial inclusion with 100% digital operations through an application that initially opened a debit account that would serve as a reference for a subsequent line of credit.

Klar's business quickly found an echo in the Mexican fintech ecosystem and in the increasingly digitized clientele of financial service providers. The company only started operations last year In less than 12 months, the company already has a little more than 200,000 customers and has placed more than 25,000 lines of credit .

As mentioned earlier, their operations are not traditional. In fact, they are using new methods of evaluating customers in Klar, including the abolition of so-called "archaic schemes" such as the Credit Bureau.

Credit profile with new standards

When a customer decides to purchase the Klar debit card, the first thing they notice is that the plastic is priceless and there are no hidden additional costs. He also receives between 1 and 5 percent of his total purchase every month The First Step.

Your behavior with the debit card is crucial for the next disruptive product that Klar is offering: credit.

“Based on the history of your debit card, we determine that with certain spending behavior, you are a person who can pay us a credit ;; This is very different from the way traditional banks rate customers for lending. We believe that office-based credit analysis shows us a photo of the past that is not always reliable and leaves out many aspects of the client that are used to assess their current financial situation. That is why we, including us, grant credit. Even if you consult the Credit Bureau, it is not critical, ”says Daniel Autrique.

These innovative criteria, which were also successful because Klar has tripled its customer base in the pandemic despite the context of the past few months in the country and its crime rates practically do not exist, have caught the attention of mutual funds from the start.

Successful capitalization round

When Klar was born, Klar achieved an unusual starting value of $ 57 million (more than 1,100 million pesos) in a first round of capitalization (seed capital) led by Quona Capital with the participation of Santander Innoventures and other multinational investors.

So great is the success and confidence in the business model that the company recently completed an additional round of investments called the Series A. which has raised $ 15 million Also, in a process led by Prosus (formerly known as Naspers Ventures), one of the world's largest mutual funds in startups and technology, it is the first time that this fund has invested in a Mexican startup, and in everyone in general sector . Overall, the company has raised $ 72 million in debt and equity since it started operations a little less than a year ago.

The resources of the Series A investment will serve to consolidate the technological operation, as Klar also differs in this: “We have a solid team of more than 60 high-ranking engineers of various nationalities, whose headquarters are in Berlin. The German capital is currently known worldwide as the Silicon Valley of the fintech sector. Due to their high standards and constant innovations, we largely carry out our technological development there, "says the company's CFO.

Another part of the resources will be invested in the company's operations in Mexico, the only country in which the company has operated and in which You will stay focused for a long time, market size and opportunities, we have work for a while, for now it is and will be our project. " explains Daniel Autrique.

And the fact is that Mexico presents so many opportunities for the sector that startups from other latitudes have already landed in the country to get a piece of the market. At the end of September the Argentinian digital banking startup Ualá announced the expansion of its operations in Mexico after it was announced last year that the company would double its size after receiving new investments from Tencent Holdings and SoftBank Group Corp, Japan's giant tech investment.

Ualá will offer a Mastercard in Mexico for physical and online purchases, cash withdrawals from ATMs, and sending and receiving payments, the company reported.

In order to venture and innovate, it is necessary to know the market in which the project or projects are to be developed. Autrique has extensive experience in transnational companies in the financial sector. These experiences led to Klar whose main goal is to take advantage of the banking system for millions of Mexicans who have traditionally been excluded. In that short period of time it was possible to consolidate a world-class neobank focused on the bulk of the Mexican population, 100 percent digital, with a loan offering that is completely different from traditional banking for any person living in Mexico a financial one Representing an inclusion effort with results.

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