Belvo, the Barcelona-based fintech providing open banking in Latin America, has landed $10 million in funding to launch an office in Sao Paulo, Brazil, and hire between 40-50 new developers.
The round was led by San Francisco-based Founders Fund, an early backer of Stripe, and Latin American (LatAm) venture capital firm Kaszek Ventures, an early backer of Nubank, Konfio, and Creditas.
Belvo team celebrating one-year anniversary in May
The fintech, whose second hub and main market is in Mexico City, says it will use the funding to extend its data application programme interface (API) to more countries. Currently it is live in Mexico and Colombia, but the company plans for the API to be live in four more countries “very soon”.
The start-up also wants to use the fresh capital to develop new API verticals in areas such as intelligence, and says it will triple the size of its 30-person team with hires across Barcelona, Mexico City and Brazil.
Prior to this round and since founding the start-up just 12 months ago, Belvo has raised $3 million in pre-seed funding and became one of the start-ups in YCombinator’s Winter 2020 batch.
Earlier backers include UK-based private equity investment firm Maya Capital, the Athens-based venture capital firm VentureFriends, financial notification’s and context banking software vendor Latinia, and David Vélez, founder and CEO of Brazilian neobank Nubank.
Belvo’s co-founder Pablo Viguera told Sifted that “the ecosystem in fintech is exploding in LatAm”. “You look at Brazil and Mexico, there are roughly about 500 fintechs in each of those countries and it’s growing 30-40% every year,” Viguera added.
“Our big vision is to be the pan-LatAm financial API platform,” says Viguera
Read more: Colombian consumer credit fintech Addi lands $15m
The open banking start-up wants to help fintechs access financial data in institutions which are not banks, as nearly half of LatAm’s 625 million population is unbanked according to the World Bank, and only 113 million people in the region have credit cards according to Payments Cards & Mobile.
Viguera uses the example of the gig economy, which gets paid into a digital wallet rather than a traditional bank account. “That’s pretty valuable data to, for example, decide whether to give that person a loan and how much to charge that person for that loan,” says Viguera.
“Creating that single source of truth from these different sources of financial information is particularly tricky in regions like LatAm.”
Last month, the South American country saw Ozone API, a London-based fintech, partner with TecBan, the operator of Banco24Horas to kickstart its open banking adoption.
At the beginning of May, Brazil’s central bank, Banco Central do Brasil (BCB), released a new set of regulations which target the sharing of data and services among financial and payments institutions licensed by the BCB.
To be introduced in four stages, starting in November 2020 with full implementation landing in October 2021, the new rules are intended to reduce “information asymmetry” between financial services providers, and kickstart new business in verticals such as financial comparison marketplaces, financial advisories, and payment initiation providers.
“Our big vision is to be the pan-LatAm financial API platform,” says Viguera. “Our goal for 2020 is to be live in the three main markets in LatAm, so Mexico, Colombia and Brazil.”
Read next: Brazil introduces open banking with UK fintech Ozone and TecBan
