Latin American fintech Kiwi raised $80 million in funding to boost lending to underbanked Latino migrants in the United States.
The lending startup, founded in 2020 by first-generation immigrants, secured a $75 million debt facility from U.S. investment firm i80 Group. It also raised $4.5 million in a pre-series A funding round from Advent-Morro Equity Partners, Altio Capital, and Independent Capital.
The fintech, based in Puerto Rico, grants loans to Latino consumers in the United States who struggle to get bank financing. According to Kiwi, the segment frequently lacks a robust credit history, which results in them being excluded from the traditional banking system.
“We aim to revolutionize how Latinos obtain financing and establish their credit identity,” said Mariano Sanz, one of the co-founders at Kiwi. Leveraging machine learning models, Kiwi argues it can offer thin-file borrowers fresh capital at an affordable cost.
Funding to drive product expansion
The startup reports a customer base of 30,000 in the country. It currently offers individuals unsecured loans and a payment tool for small and medium-sized enterprises that resembles the Buy Now Pay Later model.
With the new funding, it aims to introduce new products and broaden its suite aimed at underbanked Latinos. A press release underscored that Latinos are now the largest minority group in the country, comprising roughly 18% of the total population.
“We take pride in equipping underserved Latin immigrants with the tools and resources necessary to establish credit and secure access to capital,” Sanz said. Kiwi considers as well the possibility of expanding to Latin America as well. ” We remain dedicated to growing and expanding our services to serve more customers across the US and eventually Latin America,” he said.
Investment rounds amid a broad decline in VC money
The news from Kiwi comes as investments in Latin American fintechs gradually pick up following a muted first quarter. Mexican fintech Kapital secured $65 million in funding in May, while payment fintech Liquido raised $27 million. Leasy, in Peru, also tapped $25 million.
Overall, funding to Latin American startups saw a 70% decline in the first quarter, down to the lowest volume of investments since 2020 as risk-aversion took hold of venture capital investors.
There were nearly 190 funding rounds in the first three months of the year, amounting to $1.3 billion in investments, according to data compiled by Itau BBA in collaboration with Sling Hub. This compares to $4.1 billion in the year-ago period.
Despite the drop, fintech continues to be the leading recipient of those funds, with $0.6 billion received by financial technology startups in the three months.