Mexican BNPL player Kueski raises $ 202million in debt and equity as he approaches $ 100million + in ARR – TechCrunch


Kueski, a Mexico-based buy now, pay later online consumer lender, today announced that it has raised $ 202 million in equity and debt financing.

StepStone Group (which recently acquired Greenspring Capital) led the $ 102 million funding round and Victory Park Capital led the $ 100 million debt financing. StepStone was joined by other new investors, including One Prime Capital and Glisco, as well as existing funders Altos Ventures, Cathay Innovation, Richmond Global Ventures, Rise Capital, Tuesday Capital, Angel Ventures and Cometa. With the latest financing, Kueski has now raised over $ 300 million in equity and debt capital. Altos Ventures led their Series B in 2019.

The company declined to reveal its current valuation or concrete revenue figures, but CEO and founder Adalberto Flores told TechCrunch he expects it “to hit the $ 100 million mark soon + ARR “.

Flores founded the company in 2012, technically before “buy now, pay later” (BNPL) was cool. He was motivated after he, his friends and family struggled to access “and how terrible the user experience was to access financial services in Mexico.”

For example, he says, his father owned a stable and profitable business with nearly 100 employees and yet he was unable to access credit. Additionally, the experience of having to physically visit a bank branch can be a daunting experience “since you can become a target for thieves if they think you have money,” according to Flores.

“This situation is a predominant problem in Mexico, and Mexico has the fifth highest rate of unbanked citizens in the world,” he said. “Almost two-thirds of people are employed in the informal economy, which means they are paid in cash, which is never deposited into a bank account. These circumstances create a difficult environment in which financial institutions have little or no information to determine a person’s ability to repay credit.

As a result, 80% of consumers in Mexico do not have access to a credit card and as a result, 78% of merchants do not have a point of sale terminal.

Flores founded Kueski because he wanted to expand access to basic financial services to the Mexican population. Instead of relying on information from the credit bureau, the business uses contextual data such as device insights, real-time behavioral data, and demographics, along with many other types of data sources. which are then analyzed by its artificial intelligence and machine learning technology to predict repayment capacity.

“The large dataset that we were able to build after receiving six million unique applicants provides Kueski with a powerful data network effect that allows us to more accurately predict a candidate’s ability to repay a loan,” said Flores.

Overall, the fintech offers three products: Kueski Pay (BNPL), Kueski Cash (its inaugural offering focused on personal loans) and Kueski Up (interest-free earned payday advances) – which Flores says have all seen a boom. “Very strong growth” in the last 12 months. In particular, three-year-old Kueski Pay experienced “210x” growth in gross cargo volume (GMV) from November 2020 to November 2021. During the same period, his Cash product grew by 320%. Kueski Up is his new product. Since 2012, the company has granted nearly 5 million loans online.

“Our goal is to become a great financial app focused on the Mexican consumer,” Flores told TechCrunch.

A unique aspect of Kueski’s services, according to Flores, is that the company allows users to generate a credit history as it signals when customers pay on time (or defaults on a payment).

Like many other fintechs, Kueski has seen increased demand due to the COVID-19 pandemic.

“During the pandemic, Kueski’s growth has been historic and as a business we have been able to take this moment to reduce the friction users have when shopping online, which includes having to go to a convenience store. and prepay the full purchase price. before their order is confirmed, ”Flores told TechCrunch. “From a credit standpoint, the results have been fantastic. We were able to update our AI and machine learning models on a daily basis, while banks typically update theirs every six months. “

The new funding will be used to continue to grow BNPL’s presence in Mexico and to create new products for Mexican consumers. Today, the company has nearly 500 employees, against 223 in September 2020. It also plans to use its new capital to reach nearly 1,000 employees by the end of 2022.

Recently, Kueski took the leap of integrating thousands of merchants (such as Steve Madden and Sally Beauty) into his BNPL “ecosystem”. It is against 49 at the beginning of the year. Currently, Kueski Pay is integrated with Walmart, Mexico’s largest retailer, and offers purchases from other retailers and services such as Kipling, VivaAerobus, Nautica, and Xiaomi Shop. Specifically, in the fourth quarter, Kueski plans to launch his BNPL product in physical stores, which he says offers an alternative to the traditional high-interest financing plans offered by Mexican banks “for decades” and which are still popular due to the lack of alternatives.

Kueski will also soon launch an app in the Google Play Store and the Apple App Store.

Image credits: Kueski

Merchants love Kueski Pay, according to Flores, because it has enabled “hundreds” of businesses to increase their online sales by up to 70%, eliminating chargebacks and increasing the average ticket by up to 50%.

“We will close the year with over a million unique users who have transacted with us through one of our financial products,” said Flores. “We think buying now, paying later is just beginning in Latin America. In Mexico, BNPL represents a huge opportunity for us, given the few people who have access to traditional banking services, the role cash plays in our society and the limited range of payment methods available.

Kueski is currently focusing on the Mexican market, but plans to expand to other Latin American countries in the future.

StepStone Managing Partner Jim Lim said his company was excited about opportunities in the BNPL industry in Mexico and the rest of Latin America.

“We are delighted to partner with one of the market leaders in Latin America, Kueski,” he said in a written statement.

Anthony Lee of Altos Ventures believes that the fact that Kueski has “leveraged years of technology development and consumer ready data” to launch his buy now, pay later product gives him “valuable market experience that is simply not available to new entrants ”.

“Because of this, the company can better secure consumers and support merchants in a unique way that its competitors cannot match,” he wrote via email.

Of course, Kueski is not the only BNPL player in Mexico. Nelo, a startup founded by former leaders of Uber’s international growth team, began offering buy now, pay later services in Mexico earlier this year. Its ultimate goal is to extend to all of Latin America. Earlier this month, he raised $ 20 million to help him achieve that goal.


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