Mexican startup Credijusto raises $100 million, seeks to boost loans amid coronavirus

March 23, 2020
Mexico Correspondent, Reuters
📷
infobae.com
Mexican fintech startup Credijusto has raised $100 million in debt from Credit Suisse Group, a move that will help it extend more loans to small and mid-sized businesses as banks gauge how to respond to the impact of coronavirus, its joint CEO said.

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Although the deal was in the works before the coronavirus epidemic intensified, it closed last week amid significant upheaval in financial markets, Credijusto Co-Chief Executive David Poritz told Reuters.

Small and medium-sized companies have long struggled to access financing from Mexican banks. That problem could worsen if financial institutions take a more conservative stance amid the market turmoil triggered by the pandemic.

With the Credit Suisse (CSGN.S) cash infusion, Credijusto is better equipped to help bridge the financing gap, Poritz said.

“There is a massive market opportunity of strong, creditworthy businesses that banks are shutting their doors to,” he said.

Credit Suisse declined to comment on the transaction. Last year, Mexico City-based Credijusto raised $100 million in debt from Goldman Sachs and $42 million in an equity round co-led by Goldman Sachs and Point72 Ventures.

The Mexican government has said it is looking to fintechs to help boost financial inclusion in the country, where more than half the population lacks a bank account.

Mexican fintech startups have drawn prominent investor attention over the past year, including from top Silicon Valley investors and Japanese conglomerate SoftBank.

But as investors seek safer ground to weather market turmoil, some entrepreneurs fear the budding tech sector could see tougher days ahead.

“It is going to be a more challenging time for raising capital and that’s not just in Latin America, that’s everywhere,” said Michael Sidgmore, a partner at venture capital firm Broadhaven Ventures, which has invested in Credijusto.

Nevertheless, Sidgmore said the market turmoil could create opportunity for Credijusto, noting the startup has seen an uptick of interest from small and medium-sized business in recent weeks.

“Small and medium-sized enterprises in Latin America are massively underserved to begin with, and any shock like this tends to make banks retrench,” he said.

Vicente Cruz, founder of IT Burgers, a hamburger eatery and delivery service in Mexico City, said he wrote to a Mexican bank more than two weeks ago to inquire about credit but did not hear back.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y de ellas son responsables sus autores. No reflejan ni comprometen el pensamiento u opinión de Latam Fintech Hub, por lo cual no pueden ser interpretadas como recomendaciones emitidas por la platafomra. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista sobre el ecosistema Fintech.

Although the deal was in the works before the coronavirus epidemic intensified, it closed last week amid significant upheaval in financial markets, Credijusto Co-Chief Executive David Poritz told Reuters.

Small and medium-sized companies have long struggled to access financing from Mexican banks. That problem could worsen if financial institutions take a more conservative stance amid the market turmoil triggered by the pandemic.

With the Credit Suisse (CSGN.S) cash infusion, Credijusto is better equipped to help bridge the financing gap, Poritz said.

“There is a massive market opportunity of strong, creditworthy businesses that banks are shutting their doors to,” he said.

Credit Suisse declined to comment on the transaction. Last year, Mexico City-based Credijusto raised $100 million in debt from Goldman Sachs and $42 million in an equity round co-led by Goldman Sachs and Point72 Ventures.

The Mexican government has said it is looking to fintechs to help boost financial inclusion in the country, where more than half the population lacks a bank account.

Mexican fintech startups have drawn prominent investor attention over the past year, including from top Silicon Valley investors and Japanese conglomerate SoftBank.

But as investors seek safer ground to weather market turmoil, some entrepreneurs fear the budding tech sector could see tougher days ahead.

“It is going to be a more challenging time for raising capital and that’s not just in Latin America, that’s everywhere,” said Michael Sidgmore, a partner at venture capital firm Broadhaven Ventures, which has invested in Credijusto.

Nevertheless, Sidgmore said the market turmoil could create opportunity for Credijusto, noting the startup has seen an uptick of interest from small and medium-sized business in recent weeks.

“Small and medium-sized enterprises in Latin America are massively underserved to begin with, and any shock like this tends to make banks retrench,” he said.

Vicente Cruz, founder of IT Burgers, a hamburger eatery and delivery service in Mexico City, said he wrote to a Mexican bank more than two weeks ago to inquire about credit but did not hear back.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y solamente sus autores son responsables de ellas. No reflejan ni comprometen el pensamiento o la opinión del equipo de Latam Fintech Hub y, por lo tanto, no pueden interpretarse como recomendaciones emitidas por la plataforma. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista en el ecosistema Fintech.
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País de origen:
Headquarters:
CDMX
Monto inversión:
100
M
Ronda financiación:
Debt Financing
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