MEXICO CITY--(BUSINESS WIRE)--Grupago, a fintech startup pioneering digital microcredit for small businesses (SMBs) in Latin America, announced today that it has secured $4.3 million in seed financing. The investment is led by Deciens Capital and joined by Precursor Ventures, Clocktower Ventures and Twine Ventures, among other venture funds. They were also joined by a number of super-angels across the United States and Mexico, including Zac Bookman (CEO, OpenGov), Oso Trava (Cracks Fund), Pepe Shabot (CEO, ION Mexico) and Paul Sawaya (co-founder, Human Interest).
Grupago launched its micro-credit business in October 2023 with the goal of filling a crucial gap in Latin America’s small business market: providing credit to millions of small business owners across Latin America. The LatAm SMB market is massive – with SMBs accounting for 90% of businesses and generating nearly a third of GDP – but experts estimate up to 87% of their credit needs are unmet.
This gap is even more pronounced for the informal micro-businesses Grupago targets. Fintechs have been unable to overcome the challenges of reaching, underwriting and collections for this segment, while traditional lenders rely on expensive brick-and-mortar infrastructure, driving up loan costs and limiting reach.
Grupago has been able to overcome these obstacles and effectively serve micro-SMBs by bringing together three key innovations – AI-driven underwriting, group collateral and community distribution – into a unique, fully digitalized offering. Specifically:
- AI-driven underwriting: Grupago harnesses the power of AI, including non-traditional data sources, to underwrite small loans. Over time, it systematically expands credit limits as customers demonstrate successful repayment histories.
- Group collateral: Borrowers join together as part of lending groups and co-sign for each other’s loans. When a payment is missed, other members are responsible for repayment. This approach allows Grupago to profitably collateralize an otherwise uncollateralized customer segment, as well as build much more robust underwriting data than individual loans.
- Community distribution: Grupago acquires community leaders online, who then build lending groups in their local communities. This allows the company to reach rural and otherwise hard-to-reach customers via its unique and cost-effective online-to-offline acquisition approach.
Grupago is currently active in Mexico and seeks to scale across Latin America over time. Its first focus is on a group loan product focused on women entrepreneurs.
“Latin America has been experiencing a true renaissance in its financial services infrastructure and offerings,” said Grupago founder and CEO Uri Pomerantz. “Our approach builds on cutting-edge AI and non-traditional data sources while applying group lending techniques first developed by Nobel-prize winning research pioneered by Muhammad Yunus in Bangladesh. Our vision is to focus on one of the most important, yet simultaneously overlooked, market segments – micro-SMBs – to ensure these entrepreneurs can quickly and easily access low-cost capital, in a fully digital experience, that helps their businesses thrive.”
“Grupago and its founder Uri are emblematic of the types of innovators Deciens dreams of working with,” said Deciens Capital founder and managing partner Daniel Kimerling. “Not only are Uri and his team working to expand financial access to underserved communities – a value we hold near and dear – they are also deeply curious and tirelessly collaborative, which allows us to be their partner in building their game-changing solutions.”
Grupago is headquartered in Mexico City.
About Grupago
Grupago is pioneering digital microcredit for small and mid-sized businesses (SMBs) in Latin America, leveraging artificial intelligence, group collateral and community distribution to extend credit to micro-SMBs across the region who have been shut out of traditional SMB lending avenues. Grupago was launched in October 2023 by CEO Uri Pomerantz, and is backed by investors including Deciens Capital, Precursor Ventures, Clocktower Ventures, Twine Ventures, other venture funds and super-angels across the US and Mexico.
For more information, visit https://www.grupago.mx/en.
About Deciens Capital
Deciens is a venture capital firm that supports early-stage founders building the next generation of financial services. Founded in 2017 by Dan Kimerling, Deciens exclusively focuses on leading investments in companies of consequence across industries and geographies. The firm supports entrepreneurs leading the digital transformation of long-standing institutions by collaborating with companies like Chipper Cash, the largest African fintech, Treasury Prime, the leading banking as a service company, and GlacierGrid, which helps measure, monitor, and protect climate sensitive supply chains around the world.
For more information, visit deciens.com.
