Vostok puts $15m into Mexican SME lending platform Konfio

Vostok Emerging Finance announced a $15m investment into Mexican online small business lending platform Konfio on Monday.

The company said it led a broader Series C investment round of $25m, and was joined by existing investors including Quona Capital, QED, Kaszek Ventures and International Finance Corporation, among others.

Following the transaction, VEF held a minority position and board representation in the firm.

Vostok said Mexico was the second largest market opportunity in Latin America with a population of 127 million, and around 7 million small businesses.

It described Konfio as a “digital-first” unsecured lending platform, with a mission to support the growth of the country’s vast underserved small business community.

Within the broader Mexican small business credit space, Konfio was focussing on the top-end credit of the small business segment, which was viewed as a $45bn opportunity.

For every 20 companies in Mexico, 19 were considered ‘very small’, with annual sales of up to $0.7m.

With its online and digital first approach, Konfio was leveraging technology and big data analytics to complement traditional financial analysis and streamline the loan application process, which Vostok said was providing “convenience and affordability” to customers who were creditworthy but historically underserved by traditional banking.

“We are excited to announce our latest portfolio investment and our first in Mexico,” said Vostok Emerging Finance managing director Dave Nangle.

“Konfio is an asset we have tracked for two years now and it represents a truly unique opportunity and a stand-out asset in Mexican SME credit space.”

Nangle said Vostok “loved” scale opportunities, with clear traction and strong management teams, adding that Konfio “very much fits” its investment mantra.

“We look forward to working with David Arana and his team on the journey ahead.”

Konfio founder David Arana added that his company was “delighted” to partner with Vostok Emerging Finance to continue its mission of “empowering SMEs” through access to credit.

“Having shown strong traction in the last 12 months, we are looking forward to continue investing in building a world class company, improving our technology stack and scaling beyond unsecured business term loans, with the launch of new products for underbanked SMEs in the region.”