Kueski, a Mexico City-based “buy now, pay later” and online consumer lender, announced it has secured $202 million in equity and debt funding.
StepStone Group (which recently acquired Greenspring Capital) led the $102 million equity round and Victory Park Capital led the $100 million debt financing. StepStone was joined by other new investors including One Prime Capital and Glisco, as well as existing backers Altos Ventures, Cathay Innovation, Richmond Global Ventures, Rise Capital, Tuesday Capital, Angel Ventures and Cometa. With the latest financing, Kueski has now raised over $300 million in equity and debt capital. Altos Ventures led its Series B in 2019.
The company declined to reveal its current valuation or hard revenue figures, but CEO and founder Adalberto Flores told TechCrunch he expects it will “soon achieve the $100 million+ ARR milestone.”
Flores founded the company in 2012, technically before “buy now, pay later” (BNPL) was cool. He was motivated after he, his friends and family experienced difficulty in getting access “and how terrible the user experience was in accessing financial services in Mexico.”
For example, he says, his father owned a stable and profitable business with almost 100 employees and yet, he was unable to access credit. Also, the experience of having to visit a bank branch physically can be a daunting experience “since you can become a target for robbers if they think you have cash,” according to Flores.
“This situation is a prevailing issue in Mexico, and Mexico has the fifth highest rate of unbanked citizens globally,” he said. “Almost two-thirds of people are employed in the informal economy, meaning they are paid in cash, which is never deposited into a bank account. These circumstances lead to a challenging environment where financial institutions have little to no information to determine someone’s credit repayment ability.”
As a result, 80% of the consumers in Mexico lack access to a credit card and because of this, 78% of merchants don’t have a POS terminal.
Flores founded Kueski because he wanted to expand access to basic financial services to Mexico’s population. Instead of relying on credit bureau information, the company uses contextual data such as device information, real-time behavioral data and sociodemographic data, and many other types of data sources that are then analyzed by its artificial intelligence and machine learning technology to predict an applicant’s repayment ability.
“The vast dataset that we’ve been able to build after receiving six million unique applicants provides Kueski a powerful data network effect that allows us to more precisely predict an applicant’s ability to repay a loan,” Flores said.
Overall, the fintech has three products: Kueski Pay (BNPL), Kueski Cash (its inaugural offering focused on personal loans) and Kueski Up (interest-free earned wage advances) — all of which Flores says have seen “very strong growth” in the past 12 months. In particular, three-year-old Kueski Pay had “210x” Gross Merchandise Volume (GMV) growth from November 2020 to November 2021. During that same time frame, its Cash product grew by 320%. Kueski Up is its newest product. Since 2012, the company has granted nearly 5 million loans online.
“Our goal is to become a financial super app focused on the Mexican consumer,” Flores told TechCrunch.
