Having a credit card is commonplace for most Americans.
In countries such as Mexico, more difficult and less common attemptsIn fact, less than 20% of the population has access to some form of credit and only an estimated 10% have a credit card.
In recent years, a number of startups have emerged to provide more options for underserved Mexicans to promote inclusion in the country.One such startup is BexiFormer Citi executive Rojo Blasquez launched the company in 2018, later joined by Gabriela Estrada (who has worked at Citi for over nine years), Cinthia Merlos, Salvador Michel and Carlos Franco as co-founders. All the founders grew up in middle-class families and are personally invested in making Latin America’s rising middle class have access to better financial services, she said, serving as her COO of the company. said Merlos of
“We all come from middle-class families here in Mexico. We went to public school and worked hard to get private school scholarships and study abroad,” Estrada said. told TechCrunch. “We really want to make a difference, and we see that change with our customers every day.”
![Founders Bexi](https://techcrunch.com/wp-content/uploads/2023/02/Founders-Vexi.jpg?w=680)
Image credit: Bexi
mexico city-bAcedo Vexi calls itself a neobank, but does not yet offer checking or savings accounts. As of now, its only offering is credit cards and through American Express without the use of third party issuers or processors. According to Merlos, this will allow the company to generate more revenue through exchange fees. That’s three times more than he is for startups that use third parties. Vexi’s services also include interest-free installments, cashback, purchase insurance, and “competitive” interest rates. Competitiveness means a range of 29% to 79%, considered very high in the United States. In Mexico, however, interest rates have fallen significantly below microloan rates, notes Merloth.
“In Mexico, only 1 in 10 people has access to a credit card. This is generally because they earn less than what traditional banks require, or they work in the informal economy because there are no formal sources of employment. That’s why,” Merlos said. “That’s why we compete with cash and high-interest microcredit, not traditional banks.”
About 75% of Vexi cardholders are between the ages of 18 and 35 with an average income of $600 to $800 per month. close to 60% The majority of its customers are self-employed or self-employed, and most report using their cards to purchase business supplies.
Merlos and Estrada are the company’s A self-developed credit scoring system allows credit cards to be phased in, so lending is the responsibility. As users prove their creditworthiness, their credit limit (and score) increases and interest rates decrease. The pair also claim that their users are keen to build credit, so they work hard to make sure they pay on time and never lose access. also provides users with a way to learn more about how to better manage their finances and spending.
“Our vision is to use our technology, talent, passion and experience to provide people in Latin America with high interest loans that are inaccessible and can never be recovered from their first lines of credit to start their credit history. It’s about breaking the vicious circle of not being able to build,” said Estrada, CEO of Vexi.
The pair is unhindered by competitors in space.
““We want to teach people how to drive a car, and we’re learning how to drive a car, so we give them Nissan cars,” says Merloth. “But what we do differently is we say, ‘Okay, I’ll teach you how to drive.’ I offer you a better car while showing .
And today, the company announced it has raised $8 million in an “oversubscribed” Series A round led by Magma Partners. Secured $3.7 million in seed round and nearly $20 million in debt by the end of 2021. Previous investors Alpha4Ventures, Noa Capital and Pomona Impact also participated in the Series A round, along with new backers Redwood Ventures and US-based Rebalance Capital.
“We have been a strong supporter of Vexi since 2020 and decided to continue because the Vexi team is solving real problems for people in Latin America. We look forward to helping them build the future of Finances of Mexican Society,Magma Managing Partner Nathan Lustig said:
Vexi says it will use the new funding to grow its customer base, recruit new talent to strengthen its team, and enhance its proprietary technology stack and risk algorithms. The company declined to provide specific revenue numbers, but Merlos said the company’s revenue has increased “four times” over the past 24 months.
“Prior to this Series A, we raised less than $4 million in capital and received 2.5 million applications,” said Estrada. The company has issued about 850,000 credit cards to date.
“We believe in sustainable growth methods. We may be slower paced than other startups, but our unit economics are solid and positive,” Merlos told TechCrunch. “This very fact has allowed us to self-sufficiently during the pandemic and has made the company stronger to deal with the recession.”
For now, Vexi is focused only on the Mexican market. The Mexican market is huge in itself, with a population of about 127 million. Eventually, we plan to expand from outside the country to other parts of Latin America.
Other Mexican start-ups in this sector include: story, Clara and Zenphiamong others.
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