19 October 2022 | 12:29
The Mexican application “buy now, pay later” And that got one $ 100 million line of credit of the US private equity firm Victory Park Capital.
The funding will be used by fintech founded by Kyle Miller and Stephen Hebson cushion your loan portfolio and freeing up capital to expand your business, as well as investing in employees and marketing.
Currently, the company’s growth will be concentrated in the Mexican territorywhereas there are “many opportunities” in a market where credit card penetration is less than 12%, said CEO Kyle Miller.
Just in April of this year, Nelo announced the launch of a virtual credit card with Mastercard, allowing users to generate a single credit card for purchases through the app.
The director pointed out that the company uses a subscription algorithm to determine credit limits and interest rates and verify users’ credit history with credit bureaus in Mexico.
Nelo has has facilitated over 3 million purchases to date with online retailers such as Walmart, Amazon and the phone provider Telcel.
Read more: Fintech, with less capital raising due to increases by central banks in Latin America
Market with ups and downs
The capital injection for Nelo comes at a time when the market is increasingly saturatedas there are more competitors like Kueski, Aplazo and Atrato, in a market like the Mexican one where credit penetration is low.
Although an increase in card payments has been reported, cash is still the most accepted method in Mexico with 79% of the total.
In addition to the above, the best time for companies that have the “buy now, pay later” business model may be lagging behind, since they experienced their heyday during isolation implemented to prevent the spread of COVID-19 thanks to the growth of e-commerce.
However, analysts have since warned that easing consumer spending and rising interest rates could damage the business model and consolidation of forces with larger players.
Read more: Mexico, the country that wants to conquer fintech
With information from Reuters
