ePesos, a Mexican mobile payments startup, has landed a $6m investment in a round led by Santander’s venture capital fund.
Santander InnoVentures led the round, with participation from VilCap Investments, Finlab, and Pomona Impact. The round also included Sorenson Impact Foundation, a social impact fund, which is making its first investment in Mexico.
ePesos’ aim is to build a new payment channels for people and companies with few or no financial services. It offers low-cost credit lines to SMEs in Mexico without the need for a bank account, with customers receiving and refunding funds through an electronic wallet. The startup is also in the process of teaming up with payroll software vendors to provide payroll advance solutions.
Manuel Silva Martínez, director of investments at Santander InnoVentures, said: “Our investment in ePesos is a sign of our commitment to financial inclusion worldwide and supporting the progress of small businesses, something we have prioritized at Santander InnoVentures.
“EPESOS investment is also an important step in strengthening our investment strategy in Latin America, and we are excited to be able to do new and relevant things in the region.”
The deal represents the first investment in Latin America in Grupo Santander’s $200m fund, which has already made 17 investments in financial technology since its launch in 2014.
Earlier this year, Mariano Belinky from Santander InnoVentures told FinTech Global that Latin America’s unique payments situation could be a major opportunity for investors and startups
He said, “There is a far smaller penetration of mobile payments in Latin America. People tend to use cash a lot, which is not the most efficient option. The economy works in a very cyclical manner and any new payment solution is challenging to introduce.”
According to data by FinTech Global, South America represented the weakest region for investment in payments and remittances companies last year, with just $8m invested. In comparison Asia saw more than $8bn of capital committed to these types of companies, while North America received around $1.5bn.
Earlier this year, Santander InnoVentures c0-led a $6m investment round in Smartphone financing platform PayJoy alongside ITOCHU Corporation.
The venture capital fund also took part in Socure’s $13.9m Series B funding round. The round for the digital identity verification platform was led by Commerce Ventures.
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