Mexican challenger bank Fondeadora adds $14 million to its Series A

Published March 15, 2021

Fondeadora, a fintech startup based in Mexico City and building a challenger bank, has extended its Series A funding round. I covered the company’s original round back in August 2020. And now, Fondeadora is adding $14 million on top of the original $14 million it had already raised — it now represents a $28 million funding round.

Portag3 is investing in the extension. Google’s Gradient Ventures, an existing investor in the company, is putting more money in Fondeadora. Gokul Rajaram and Anatol von Hahn are investing as business angels as well.

As a reminder, Y Combinator, Scott Belsky, Sound Ventures, Fintech Collective and Ignia also participated in the first tranche of the Series A.

“We received an unsolicited and unexpected term sheet three months after our Series A,” co-founder and co-CEO Norman Müller told me. The company’s valuation has doubled with the round extension as well.

Image Credits: Fondeadora

As most people still rely heavily on cash in Mexico, creating a challenger bank represents a good opportunity. In addition to customers from legacy banks, Fondeadora can become the first bank account for many people.

Fondeadora doesn’t operate any branch for its banking service. When you create an account, you receive a Mastercard debit card a few days later. There are no monthly subscription fee and no foreign transaction fee.

Like other challenger banks, your balance is updated instantly. You can choose to receive push notifications for transactions. You can also lock and unlock your card from the app.

More recently, the company launched a card without any personal info or card numbers — a bit like the Apple card in the U.S. On the back of the card, you can find a QR code. This way, you can show your card to your friends. They scan the code and you receive money a few seconds later.

Venmo launched a credit card with a QR code in the U.S. as well. I think challenger banks and peer-to-peer payment apps around the world should all do this as it’s a great bridge between the physical world and an app.

Fondeadora acquired a bank charter and now has plenty of money on its bank account. It sounds like things are working well so far and proves once again that banking is not a global industry. There’s room for plenty of local players around the world.

There have never been more $100M+ fintech rounds than right now

Fondeadora is a Mexican challenger bank that just raised $14 million

Published August 27, 2020

Meet Fondeadora, a fintech startup based in Mexico City that wants to build a full-stack neobank. The company just raised a $14 million Series A round led by Gradient Ventures, Google’s AI-focused venture fund. Founded in 2018, the company already manages 150,000 accounts and is adding $20 million in deposits every month.

Mexico represents a massive opportunity for a challenger bank as many people still rely on cash for most of their transactions. Given that all countries are progressively switching to card and digital payments, it seems like the right time to launch Fondeadora .

Y Combinator, Scott Belsky, Sound Ventures, Fintech Collective and Ignia are also participating in the funding round.

“We launched the first crowdfunding platform in Mexico about 10 years ago,” co-founder and co-CEO Norman Müller told me. “About 50% of card transactions failed in the system.”

That platform was also called Fondeadora. After a deal with Kickstarter, Müller and Fondeadora co-founder René Serrano went back to the drawing board and thought about the problems they had while operating the crowdfunding platform. It became Fondeadora as we know it today, a challenger bank that wants to improve the banking experience in Mexico.

The team traveled across Mexico to find a bank charter that they could use. “We acquired the charter, it was owned by a group of tomato farmers in Mexico. Twenty years ago, the government gave about 10 charters to create financial inclusion,” Müller told me.

The company launched its banking service after that. You can open an account without visiting a branch. You then receive a Mastercard debit card. You can choose to receive notifications after each purchase, lock and unlock your card, send instant transfers to other users and more. There are no monthly subscription fee and no foreign transaction fee.

Up next, Fondeadora wants to democratize savings accounts. “Cash has a great UX and UI. You can touch it, you can store it in your drawer. But as a medium to generate income, it’s terrible,” Müller told me.

In the coming months, you’ll earn interest on your deposits in your Fondeadora account. “We’re investing in government bonds, it’s a very secure type of instruments. In Mexico, you can get 5% or 6% interest rate,” Müller said. The startup could allocate a small portion of deposits to medium-risk investments as well.

Image credits: Fondeadora