Investing Access in Mexico: The Rise of Flink

In the United States, access to the stock market is often taken for granted. However, many individuals globally lack the same opportunities to participate in potential wealth creation through trading. Concerns regarding responsible practices by platforms like Robinhood shouldn't overshadow this disparity.

Addressing a Systemic Imbalance

Sergio Jiménez Amozurrutia, originally from Mexico City, recognized a significant issue within his country. Despite a population exceeding 120 million, only a tiny fraction had the ability to invest in capital markets. He viewed this as a system designed to benefit the wealthy, effectively excluding many from potential financial growth.

From Lending Platform to Investment App

Following the sale of Easy Credit, a consumer lending platform co-founded with Rick Rafael Bueno (met at a 2015 Tech de Monterrey hackathon), Amozurrutia embarked on a mission. He aimed to provide Mexicans with access to an app-based consumer trading platform – something previously unavailable to them.

Securing Series A Funding

This platform, known as Flink, garnered attention from Accel, a Silicon Valley venture capital firm. Accel recently led a $12 million Series A funding round for the company. Mexico’s ALLVP, Clocktower, Kevin Efrusy, Oskar Hjertonsson, and Raptor Financial Group also participated in this financing.

Rapid User Growth and Market Leadership

The demand for Flink’s services is demonstrably strong. Since launching its initial brokerage product in July 2020, the platform has surpassed 1 million users and 800,000 active brokerage accounts. According to Amozurrutia, this positions Flink as the largest retail brokerage service in Mexico.

The company reports an average of 6,000 new customers daily, primarily through word-of-mouth referrals. Furthermore, the app recently achieved a top 10 ranking among all apps downloaded in Mexico via Google Play, even exceeding downloads of Spotify and Facebook, as stated by Amozurrutia.

Challenging Traditional Banking Structures

“Traditional Mexican banks serve less than 1% of the population,” Amozurrutia explained. “Consequently, a large portion of Mexicans lack both bank accounts and brokerage accounts.” Flink operates under the principle that Mexico’s financial system should be inclusive, benefiting all citizens, not just a select few.

Underbanked Populations in Latin America

The issue of underbanked populations is prevalent throughout Latin America. Mexico, in particular, has significantly fewer banks compared to the thousands found in the U.S. Amozurrutia believes these banks create barriers to investment through high fees and substantial minimum deposit requirements.

Addressing Financial Literacy Gaps

Amozurrutia noted a lack of investment sophistication among the Mexican population. He suggests that established banks exploit this, discouraging individuals by implying they lack the necessary financial acumen. They often propose managing funds for a fee, rather than empowering individuals to manage their own investments.

Flink’s Focus on Education

Flink aims to not only provide investment access but also to enhance financial literacy. A significant 90% of its users are first-time investors, with a large proportion being millennials.

“Compared to platforms like Robinhood or Acorns, we prioritize responsible information and access,” Amozurrutia stated. “We must provide foundational education to our users.”

Building a Supportive Community

Flink has fostered a community where users can exchange ideas and support each other, including a Facebook group with over 35,000 members.

Creating a New Market

Accel partner Andrew Braccia, an early Slack investor, highlighted Flink’s unique position. He believes the company is “creating a market” rather than competing in an established one.

“A substantial percentage of Flink’s customers are a younger demographic with no prior investment experience or access to similar tools,” Braccia said. “We recognize the responsibility this entails and are committed to providing extensive education and transparency.”

Braccia also views Flink’s story as one of “accessibility and hope” within the Mexican financial landscape.

Expansion Plans Across Latin America

Demand for Flink extends beyond Mexico, with interest from countries like Colombia, Chile, Peru, and Argentina. While regulatory hurdles currently prevent expansion, the company intends to utilize its new capital to secure the necessary licenses.

“The underlying issues within financial services across Latin America are remarkably similar,” Amozurrutia observed.

Braccia of Accel concurred, stating that Flink has already leveled the playing field for investors in Mexico.

“The fact that the majority of their users are first-time stock market participants underscores the importance of their vision for financial accessibility—a vision we believe will resonate throughout Latin America,” Braccia added.

Future Growth and Investment

Flink plans to allocate its funding towards improving the user experience, enhancing its product offering, and expanding its team to meet growing demand.

“Our objective is to reach 4 million users by the end of 2021,” Amozurrutia announced.

This investment aligns with Accel’s broader fintech strategy, which includes investments in companies like Lydia (France), Monzo and WorldRemit (London), Galileo, and Braintree/Venmo.