Mexican fintech firm Kapital seized another round of capital, $20 million in Series A and $45 million in a debt facility, less than a year after securing an $8.6 million seed round.
Founded by Rene Saul and Fernando Sandoval in 2020, the company started after the pair sold their previous company and wanted to build a platform that could provide small and medium-sized businesses across Latin America with a way to meet all of their financial needs , including cash flow, credit and investments, all in one place.
“You have to organize the business first and then it will grow,” Saul said in an interview. “That is what we do. We don’t just give you a company card or tell you to open your own bank account – we offer you the complete solution.”
Saul added that he and Sandoval saw that companies lacked visibility into their finances: many didn’t even know who they owed money to or who to collect money from.
With Kapital, clients have a sort of business reporting platform where they can get a credit card, prepay bills, view cash flow, and manage business expenses. In addition, the company has developed an algorithm that helps customers calculate future earnings and, if necessary, will assist with a future loan “just when you need it,” Saul said.
Part of Y Combinator’s Winter 2022 cohort, Kapital expanded into Colombia over the past year and launched Kapital Flex, a way to defer payments to suppliers and business invoices.
The company now partners with more than 11,000 companies, and while Saul declined to discuss revenue growth figures, he did say he expected Kapital to be profitable this summer.
It also launched full automation of its platform two months ago, so when a client executes a contract, for example, Kapital’s platform automatically sends an invoice. In addition, there are plans for more AI-driven products, Saul said.
That’s where the new capital comes in. Niya Partners and Tribe Capital co-led Series A, which closed a month ago, and were joined by a group of investors including Dropbox co-founder Arash Ferdowsi, Marbruck, Broom Ventures, FoundersX, Cresset/True Capital Management, Pioneer Fund, Kube VC and MyAsia VC. Accial provided the debt facility. In total, Kapital raised more than $30 million in equity and $145 million in debt.
“We have insured more than 100 fintech companies and almost none of them have been able to make money,” Arjun Sethi, CEO of Tribe Capital, said via email. “Kapital turned the model on its head: use fintech as an acquisition channel. Not only that, their fintech products make money. Their path will not be easy, but they have a great opportunity to reshape SME banking in Latin America.”
Plans for the capital include product development and further expansion in Colombia.
“The whole idea is how you give a company the main SaaS where you manage the money,” Sandoval said in an interview. “And also how can you make it powerful, because right now legacy players are holding the money. We can provide all this data to understand the business and help customers make decisions.”