This 'neo bank' tripled its clients in the pandemic (and without using the Credit Bureau)
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Financial inclusion has become the flag of the Fintech sector in Mexico, which has not only detected a large business niche, but is also aware that the country's conditions in this area have to change once and for all from the traditional model bank.
With the impulse of technology, the options grow and grow, but in this context there are some cases that are striking for the amount of investments they have made, for a differentiated offer and for the prestige of its world-class business partners .
Klar is a suigéneris case, from its birth it has attracted attention in Mexico and in the world for its business model, which allowed it to raise a very important amount of resources with which it presented a disruptive product to the market, exponentially increasing demand, to also achieve a first round of capitalization in record time.
“The data seems incredible, but 60 percent of the Mexican population does not have access to a bank account in the middle of the year 2020. There are more cell phones than people and a large percentage of the population depends on old practices in terms of credit, the famous usurers. The question is: why don't people have a bank account? It's something that doesn't make any 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 realized that the traditional operating model of a bank makes it very difficult to include certain sectors of the population and historically they choose to leave them out of the financial system; In addition, there is a significant phenomenon , people are already digitizing in their daily lives, but they need to digitize in their financial life, that leads us to several paradoxes because, for example, if someone deserves credit, it turns out that many times they cannot obtain it because it has no financial history, so that many are excluded for life from the system for this simple fact. This has to change, ”explained Autrique.
Faced with a scenario like the previous one, Klar was born as a real alternative for financial inclusion with 100 percent digital operation through an application through which a debit account can be initially opened, which will 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 financial services clientele; The company started operations just last year and in less than 12 months it already has just over 200 thousand clients and managed to place more than 25 thousand lines of credit .
As we noted, their operations are not traditional. In fact, in Klar they bet on new methods for evaluating clients, this includes putting aside what they call "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 find out is that the plastic is priceless and that there is no hidden additional cost, plus each month they receive between 1 and up to 5 percent of their total shopping, that's the first step.
Your behavior with the debit card is decisive for the next disruptive product that Klar offers: credit.
“Based on the history of your debit card, we detect that, if you have certain spending behaviors, you are a person who can pay us a credit ; this is very different from the way traditional banks evaluate the customer for lending. We consider that the credit analysis based on the bureau shows us a photograph of the past that is not always reliable and leaves out many aspects of the client that serve to evaluate their current financial situation, that is why we, to grant credits, neither We even consider consulting the Credit Bureau, it is not decisive ”, says Daniel Autrique.
These innovative criteria, which have also been successful because despite the context of recent months in the country, Klar tripled its client base in the pandemic and its delinquency rates are practically non-existent, they drew the attention of investment funds from a start.
Successful capitalization round
At its birth, Klar achieved an unusual initial figure of 57 million dollars (More than 1,100 million pesos), in an initial round of capitalization (seed capital), led by Quona Capital, with the participation of Santander Innoventures and other multinational investors.
Such is the success and confidence in the business model that the company recently concluded an additional round of investment called series A , through which it managed to raise $ 15 million , in a process led by Prosus (formerly known as Naspers Ventures ), one of the largest investment funds in the startups and technology sector in the world, it is also the first time that this fund has invested in a Mexican startup and in general in any sector . In total, since it began operations a little less than a year ago, it has raised $ 72 million in debt and equity.
The resources of the series A investment will serve to consolidate its technological operation because Klar is different even in that, “we have a solid team of more than 60 top-level engineers, of different nationalities, whose headquarters are in Berlin. The capital of Germany is currently considered the Silicon Valley of the Fintech sector in the world, to a large extent we carry out our technological development there due to its high standards and constant innovations ", says the company's CFO.
Another part of the resources will be invested in the operation of the company in Mexico, the only country in which they have operations to date and in which they will remain concentrated for a long time, market size and opportunities, we have work for a while, for the moment it is and will be our project ”, explains Daniel Autrique.
And it is that Mexico represents so many opportunities for the sector that startups from other latitudes have already landed in the country to obtain a piece of the market. At the end of September, the Argentine digital banking startup Ualá announced the expansion of its operations in Mexico, after announcing last year that it planned to double its size after receiving millionaire new investments from Tencent Holdings and SoftBank Group Corp, the Japanese giant investment in technology.
Ualá will offer in Mexico a Mastercard for physical and online purchases, cash withdrawals at ATMs and the sending and receiving of payments, the company reported.
To undertake 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 resulted in Klar, whose main objective is to bring the benefits of the banking system to millions of Mexicans who have traditionally been excluded, in that short time it was possible to consolidate a world-class neobank concentrated in the mass of the population of Mexico, 100 percent digital, with a credit offer totally different from traditional banking and to which any person living in Mexico, a financial inclusion effort with results.