SME lender a55 picks up investment from Santander InnoVentures

As the Latin American FinTech space is going from strength to strength, a55 has bagged a round of investment from the Santander Group’s venture capital fund.

a55 provides liquidity solutions to recurring revenue companies in Brazil and Mexico. In other words, the Latin American company is an income-secured alternative SME lender.  Essentially, a55 underwrites SMEs through a technology platform connecting bank accounts, escrow solutions, billing, payment means and credit intelligence.

The round marks Santander InnoVentures’ fourth investment into the Latin American FinTech space. For instance, it backed Brazil-based Creditas’ $55m Series C funding round in April 2018. Globally, the investment arm of the bank has invested in over 30 FinTech enterprises.

a55 was founded in early 2018 by André Wetter and Hugo Mathecowitsch in Brazil.
“We began our journey in a kitchen trying to lend our own money with pen and paper to companies with no real assets to lend against,” said Mathecowitsch, CEO and co-founder at a55. “Two years after this first iteration, it is a great honour for us to partner with Santander InnoVentures to accelerate our growth in Latin America. InnoVentures is a reference in the FinTech space with fantastic portfolio companies in Brazil, Mexico, Europe and the US we often benchmark ourselves against.”

He added, “Data is the new gold and fuels the new economy. We are building the platform of the future, where transactional and revenue data will drive credit decisions and shape the future of financial services.”

The goal of the company is to become the financing platform for service-based companies in Latin America, starting with software-as-a-service (SaaS) businesses. a55 has recently launched operations in Mexico on top of its operations in Brazil.

Since the launch, the company has grown its staff to more than 40 employees and has underwritten 50 companies in Brazil and Mexico through 350 different operations, with $7m in Mexico and $19 in Brazil. The company expects to double those numbers in the next 12 months.

Manuel Silva Martínez, managing partner at Santander InnoVentures, will join a55’s board as part of the deal. He said the coronavirus could transform the financial market at the core.

“The current crisis will accelerate shifting consumer habits to digital and subscription models,” said Silva Martínez. “This will tremendously benefit software-as-a-service companies, which will need alternative financial services providers to support their growth and success. a55 is in a privileged position to support the Brazilian and Mexican companies with their financial offering, tailored to their needs and particularities, and built by entrepreneurs for entrepreneurs. We are excited to partner with Hugo and his team to put all our financial services expertise to their service.”

The deal comes on the back of a massive jump in investment into the FinTech space in Latin America. Companies in the region has raised $5.5bn across 328 transactions since 2015, according FinTech Global’s research. More than half of deal activity has been captured by companies in the marketplace lending, payments and WealthTech subsectors, collectively amounting to 63.1% of transactions in the region since 2015.

International FinTech companies have also noticed the potential of the region, with companies like Stripe and Revolut having announced plans to expand into Latin America.

Copyright © 2020 FinTech Global

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