Flourish Ventures
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Mexican challenger bank albo raises $45 million to expand
With nearly half a million customers across Mexico and a network of 30,000 retail locations where representatives can take deposits, the challenger bank albo is already on its way to becoming a dominant player in Mexico’s emerging fintech industry.
And the company has recently raised another $45 million to consolidate its position.
“When your mission is to build the biggest bank in Mexico, you will need a ton of money,” said albo founder Angel Sahagún.
The company received its license to operate as a full depository bank in Mexico, and is slowly working toward being the premier internet-based financial services provider for Mexico’s large and growing middle class, Sahagún said.
“We are targeting a similar target market to Chime,” the albo founder and chief executive said. “We are targeting people who are underbanked and don’t have access to all the financial products in the market.”
Sahagún said the money will be used to expand into lending and insurance products the range of services albo offers. That’s a path that has already produced one multi-billion-dollar business in Nubank, Brazil’s wildly successful fintech company, which planted a flag for a new generation of Latin American startups.
While many challenger banks in the region pursued a strategy targeting upper-class and upper-middle-class consumers, Sahagún said his service had chosen a different path.
The company is trying to bring the middle and low-income Mexican consumers into the banking system by making it easy for them to move from a cash-based world to a digital one. “Where 90% of transactions are cash-based you need a value proposition that fits very well on that cash-based society,” Sahagún said.
It’s why the company set up a network of 30,000 locations, including convenience stores and drug stores, so that it can accept deposits at the places where its customers frequent.
That growth, and the company’s 40% share of the digital banking market in Mexico, according to data from Apptopia cited by the company, is why investors like Valar Ventures, Greyhound Capital, Mountain Nazca and Flourish Ventures were willing to invest as part of the $45 million round.
“albo has proven its ability to drive sustainable growth and is leading the market. This is the team that is going to transform banking in the region and we are proud to be supporting them in that,” said James Fitzgerald of Valar Ventures, in a statement.
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Qoala raises $13.5M to grow its insurance platform in Indonesia
Online lending firms might be beginning to feel the heat of the coronavirus pandemic in Southeast Asia, but investors’ faith in digital insurance startups remains unflinching in the region.
Jakarta-based Qoala has raised $13.5 million in its Series A financing round, the one-year-old startup said Tuesday. Centauri Fund, a joint venture between funds from South Korea’s Kookmin Bank and Telkom Indonesia, led the round.
Sequoia India, Flourish Ventures, Kookmin Bank Investments, Mirae Asset Venture Investment, Mirae Asset Sekuritas and existing investors MassMutual Ventures Southeast Asia, MDI Ventures, SeedPlus and Bank Central Asia’s Central Capital Ventura participated in the round, which pushes the startup’s to-date raise to $15 million.
Qoala works with leading insurers including AXA Mandiri, Tokio Marine, Great Eastern to offer customers cover against phone display damage, e-commerce logistics and hotel-quality checks. The startup says it offers personalized products to customers and eases the burden while making claims by allowing them to upload pictures.
The startup maintains partnership with several e-commerce firms including Grabkios, JD.ID, Shopee and Tokopedia and hotel and travel booking firms PegiPegi and RedBus.
It uses machine learning to detect fraud claims. It’s a win-win scenario for customers, who can make claims easily and have more affordable and sachet insurance products to buy, and for insurers, who can reach more customers.
Qoala processes more than 2 million policies each month, up from 7,000 in March last year. The startup said it is working on insurance products to cover health and peer-to-peer categories. The startup, which employs about 150 people currently, plans to double its headcount in a year.
“As a relatively new entrant in the space we are delighted to partner with leading global investors whose tremendous thought leadership as well as operational experience will allow us to maintain our innovative edge. This truly demonstrates the ecosystem’s belief in what Qoala is trying to achieve — humanizing insurance and making it accessible and affordable to all,” said Harshet Lunani, founder and chief executive of Qoala, in a statement.
Kenneth Li, managing partner at Centauri Fund, said Qoala’s multi-channel approach has the potential to unlock Indonesia’s untapped insurance industry.
“Our thesis identified that Indonesia has a considerably low gross written premium (GWP) to GDP ratio in comparison to other emerging countries, coupled with the large growing middle class in need of more security in their financial planning which allows immense potential for the insurance sector to take off in Indonesia through innovative propositions,” he added.
According to one estimate (PDF), Southeast Asia’s digital insurance market is currently valued at $2 billion and is expected to grow to $8 billion by 2025. Last week, Singapore-based Igloo extended its Series A financing round to add $8.2 million to it.
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