Aplazo Raises $27M to Expand BNPL in Mexico

Aplazo Secures $27 Million Series A Funding to Expand BNPL in Mexico

Just four months after a $5.25 million seed round, Mexican buy now, pay later (BNPL) startup Aplazo has announced a larger funding round to broaden the reach of its installment payment solutions throughout Mexico.

Company Origins and Leadership

Aplazo was co-founded in 2020 by Angel Peña and Alex Wieland. Before establishing Aplazo, Peña gained experience at Morgan Stanley in New York, focusing on credit investments within Mexico. Wieland, meanwhile, had a background in launching ventures across Latin America, having previously worked at companies such as Uber and Lime.

How Aplazo Works

Aplazo integrates directly into a merchant’s existing payment system, functioning both online and in physical stores. This allows customers to make purchases and settle the cost through five equal installments, without the necessity of a credit card.

A key differentiator for Aplazo is its focus on offline transactions. Peña emphasizes that 95% of purchases in Mexico still occur offline, and traditionally, credit cards are required for installment plans. However, credit card penetration in Mexico remains low, at under 10%, largely due to a lack of confidence in the banking sector.

Addressing the Credit Gap

“This means 90% of the population is currently underserved,” Peña explained to TechCrunch. “While there’s significant demand, banks, despite their profitability, haven’t made installment credit widely accessible.”

Merchants pay a fee for utilizing the Aplazo tool, but customers do not incur any charges. Aplazo assumes the risk associated with installment payments and potential chargebacks. Merchants benefit from increased sales conversions and larger average order values, alongside strengthened customer relationships.

Alternative Credit Assessment

Recognizing that approximately 40% of the Mexican population lacks a formal credit history, Aplazo leverages alternative data sources. These include open banking information and telecom data to evaluate a consumer’s creditworthiness and ability to afford payments. This approach optimizes approval rates and provides equitable credit options to previously excluded consumers, according to Peña.

Series A Funding Details

Today, Aplazo announced a $27 million Series A investment, spearheaded by Oak HC/FT, with continued support from existing investors Kaszek and Picus Capital. This brings the company’s total funding to over $35 million.

Future Plans and Expansion

Peña stated that the new funding was not initially anticipated, as the company possessed sufficient capital from its seed round. However, the opportunity allows Aplazo to accelerate its core mission, including investments in technology, product development, and merchant support. The company also plans to double its current team of 50 employees by February and expand into two new countries in 2022.

Growth and Market Opportunity

Since the seed funding round, Aplazo has experienced over an eightfold increase in total processing volume. Within a year, the company has established partnerships with more than 1,000 merchants operating in lifestyle sectors like fashion, footwear, and beauty. Peña estimates that these categories represent a $70 billion market in both online and offline sales.

Competitive Landscape

Aplazo is entering a rapidly growing BNPL market, currently dominated by companies like Afterpay (acquired by Square), Klarna, and Affirm. The BNPL sector has seen considerable activity recently, including mergers and acquisitions, such as ShopBack’s acquisition of Hoolah, and funding rounds for companies like Billie, Nelo, and Scalapay.

Investor Perspective

“We’ve been closely following the global rise of buy now, pay later,” said Allen Miller, principal at Oak HC/FT. “We were seeking an investment opportunity in Latin America and believed BNPL offered a compelling entry point. The region exhibits a similar appetite for this service as the U.S., but with amplified potential, and the limited access to traditional credit creates a strong foundation for BNPL success. Angel and Alex perfectly embody this vision.”

Miller anticipates a promising future for BNPL in Latin America, citing two key factors: a declining reliance on credit cards among millennials, and a desire among merchants to reach a broader customer base currently excluded due to limited credit access. Aplazo is building the infrastructure to address both of these needs, and “their ability to attract top talent from leading brands was particularly encouraging,” he added.