History of Pomelo.
Pomelo, a Latin American fintech business, today announced that it would raise $35 million in Series B financing with the help of Tiger Global Management five months after obtaining $9 million in seed capital.
This firm was founded earlier this year to develop a Latin American finance-as-a-service platform. Through compliant onboarding procedures, its infrastructure will enable fintech and embedded financial companies to create virtual accounts and issue credit and prepaid cards.
It is incredible how many illustrious investors this young company could secure in such a short time.
This financing event followed Pomelo’s June seed round extension of $1 million. Sequoia Capital’s Guillaume Pousaz, Checkouts Hans Tung, and GoCardless Matt Robinson all participated. After a long break, Sequoia made this financing part of its revived interest in Latin America.
Pomelo and its business strategy.
Pomelo has four customers even though the company is only seven months old. Three embedded finance participants and three fintech are included in this. Fintech, with a remote focus, was founded in Argentina. Since then, it has established operations and offices in Brazil and Mexico, with ambitions to grow further in Chile and Colombia. In Argentina, it received both a Mastercard and a payments license.
Pomelo asserts that although there are $900 billion in card payments yearly, only 95% of them are handled by local incumbents. The creators of the business recognize this issue from prior employment and wish to address it by developing a new payment infrastructure.
We know from experience that developing a fintech and issuing cards in Latin America is challenging. This was said by Gaston Irigoyen, co-founder, and CEO of Pomelo, at the time of the business’s most recent funding round. Launching a straightforward prepaid card can take anywhere between 12 and 18 months. Additionally, businesses must endure the discomfort of repeating this procedure in every market they serve.
New ideas of Pomelo.
Pomelos want to address this issue by developing a new kind of financial infrastructure that will
enable firms to develop fintech ventures and introduce cards more quickly throughout Latin America. Irigoyen claimed that Latin America’s financial services infrastructure is disjointed and outmoded.
The startup claims that thanks to its API-driven platform, businesses may start virtual accounts that can be linked to regional financial systems and develop compliance onboarding procedures. Additionally, it allows the distribution of debit and credit cards across Latin America.
Pomelo and legal issues.
Each market, he claimed, has its laws and subtleties. Additionally, legacy companies charge a lot for subpar technology. Most entrepreneurs and technical team members are dissatisfied with the current situation and cannot scale their products quickly enough because there are no local alternatives available. Pomelo wants to give Latin America a more European appearance. As a result, we will assist our partners in fast opening up a variety of markets, enabling them to expand their operations without having to worry about compliance, backend integrations, or thousands of contracts.
Future of Pomelo.
Tiger Global partner John Curtius observes that the Latin American tech ecosystem has flourished and that some entrepreneurs are attempting to reshape entire sectors.
At the moment, Pomelo employs 100 people. This contains former employees of Amazon Payments and Mercado Pago. Irigoyen, a former Google LatAm employee, claims that the corporation intends to add 150 new staff members by 2022. Additionally, he is a third-time founder with two exits, including one to TripAdvisor, and he previously served as CEO of Naranja X, one of the biggest neobanks in Argentina. The company will also use the fresh funding to speed up commercial and product development initiatives.