Mexican fintech Aviva recently announced that it raised $2.2 million in a pre-seed round.
The raise was led by local fund Wollef, with the participation of Newtopia VC, Seedstars International Ventures, 500 Startups and Xtraordinary VP, and a dozen angel investors from Latin America.
According to the company, this round stands out as one of the largest for this investment stage in LatAm after facing startup fundraising difficulties due to a market correction that occurred during the second half of 2022.
According to the company’s statement, the capital raised will strengthen its credit origination system based on an integrated experience that uses computer vision and natural language.
In addition, Aviva plans to develop a phygital (physical-digital) acquisition network in cities of less than 500,000 inhabitants and issue the Aviva credit card, designed for low-income users – with a potential market of more than 50 million Mexicans.
“Not only are we confident in Wollef’s investment potential, but we are also proud to know that we are partnering with a company that will benefit millions of people in Latin America,” Wollef Ventures partner Eric Perez Grovas said in a statement.
Digital banking for underserved communities
Aviva is building a digital bank powered by artificial intelligence, combining computer vision and natural language processing. Its focus will be on the needs of underserved communities in Latin America.
The fintech provides productive unsecured loans to small businesses in Mexico. It targets an audience with little or no access to traditional financing and low use or knowledge of technology tools.
Aviva currently offers real-time loans of up to $15,000 pesos (about $773), using only a video call and without needing forms.
According to research by Aviva, between 2015 and 2021, more than $2.5 billion was invested in Mexico’s fintech ecosystem. However, the percentage of clients with formal credit barely grew by 4% in the same period.
Combining the online platform with local kiosks
For the company, the reason behind this was new players in the fintech market investing in mostly digital acquisition channels and using online platforms based on apps. However, the data shows that most unbanked individuals in Mexico lack the confidence, technical ability, and device quality to purchase financial products directly through digital ads and mobile apps.
To meet this market demand, Aviva opened its first kiosk in August 2022, expanding to various locations in the country.
“During my financial career, there has been one number that remains almost unchanged; more than 40 million Mexicans excluded from formal financial systems, first by banks and now by fintechs; millions more remain trapped in a spiral of poverty caused by credit with predatory interest rates offered by formal lenders, new fintechs and informal players; In response, we designed a one-of-a-kind phygital banking experience that will give us the edge to serve and educate millions of financial nomads in Mexico and Latin America,” said the Founder and Co-CEO of Aviva Filiberto Castro.
Aviva’s founders, Castro and David Hernandez, previously managed credit portfolios at Scotiabank and Citi, leading the growth, risk, and data science offices of Mexican SME lending unicorn Konfio.
Jorge C. Carrasco is a Contributing Reporter at Fintech Nexus. He reports on fintech, economy, banking, startups, and technology, covering the most impactful stories from a Latin American perspective.
He has contributed to several international publications, such as Foreign Policy, The Spectator Australia, Estadão, Época, Washington Examiner, and Quillette. Originally from Havana, Cuba, he is now based in Brazil.