Kapital, a global banking platform, has closed a $40 million Series B equity financing round in addition to a warehouse capital line of $125 million. Tribe Capital led the round, with participation from Cervin Ventures, Tru Arrow, MS&AD Ventures, and Alumni Ventures, along with several other investors.
The company will use the funds to invest further in its R&D and technology platform to strengthen its cross-border offerings and grow its product suite.
Why We Invested
As only the third fintech company to acquire a banking license in Mexico, Kapital is poised to become a leading player in LatAm. The founding team - Rene Saul, Fernando Sandoval, and Eder Echeverria continue to set new milestones. The company raised new capital to continue scaling rapidly and satisfy cash requirements for the recently acquired banking license.
Traditional financial institutions have reduced their exposure to offering working capital to small and medium-sized enterprises (SMEs), Kapital sees a big opportunity to fill the gap and provide the necessary working capital to deserving SMEs to fuel their growth. To receive credit from Kapital, SMEs are required to use their banking-as-a-service platform. Kapital can then upsell their suite of financial products and services to clients and over time move all transactions (payments, expenses, employee loans, etc.) to flow through their platform.
The Mexican government has signed an exclusive partnership to use Kapital’s banking and corporate expense platform in order to service the approved government employee loans. HSBC will underwrite and issue these loans while Kapital will be the core technology provider. To participate in the program, SMEs must create a Kapital account.
Kapital evaluates and incorporates the previous 5 years of transaction history (revenues, expenses and tax returns) when underwriting a loan. They have access to more data than a typical U.S. institution, effectively derisking what are presumed to be some of the riskiest loans. As a result, their loan book reflects the curated level of data with a very low default rate.
The founders have known each other since childhood and have an implicit trust and excitement in working together. Their relentless hustle and passion is evident as they bootstrapped Kapital and built a capital efficient business longer than most founders. After NuBank and Uala, Kapital is the third fintech company in Mexico to acquire a banking license, lowering their cost on the warehouse lines of credit and providing credibility as the company expands to other LatAm markets starting with Columbia and Peru.
It is a privilege to partner with Kapital and we are excited to welcome them to the Cervin family. The investment in Kapital builds on our successful foray into Fintech with a focus on software differentiation. Our early investments in companies such as Paystand have informed our thesis to invest in fintech companies where the combination of software & financial products allows companies to build high growth sustainable businesses. We believe in the mission to create a more open and inclusive financial system in B2B commerce.
