belvo, latam’s answer to plaid, raises $43m to scale its api for financial services

Belvo Secures $43 Million in Series A Funding

Belvo, a Latin American startup specializing in an open finance API platform, has recently announced the successful completion of a $43 million Series A funding round.

The financing involved participation from a diverse group of investors. These included both Silicon Valley and Latin American-based venture capital firms and angel investors, such as Future Positive, Kibo Ventures, FJ Labs, Kaszek, MAYA Capital, and VentureFriends.

Significant Investor Participation

Notable individuals also contributed to the round. These included Sebastián Mejía, co-founder and president of Rappi, Harsh Sinha, CTO of Wise (formerly Transferwise), and David Vélez, CEO and founder of Nubank.

According to data from Crunchbase, this funding round constitutes the largest Series A ever secured by a Latin American fintech company.

Previously, in May 2020, Belvo had raised a $10 million seed round, co-led by Founders Fund from Silicon Valley and Kaszek from Argentina.

Focus on Latin American Fintechs

Belvo is dedicated to collaborating with prominent fintech companies throughout Latin America. Its services cater to various sectors, including neobanks, credit providers, and personal finance applications utilized by individuals across the region.

The startup’s developer-focused API platform facilitates access to and interpretation of end-user financial data. This aims to foster the development of improved, more efficient, and inclusive financial products within Latin America.

Developers of popular neobank applications, credit services, and personal finance tools leverage Belvo’s API to establish connections between bank accounts and their applications, unlocking the potential of open banking.

Comparison to Plaid

As highlighted by TechCrunch Senior Editor Alex Wilhelm, Belvo shares similarities with U.S.-based Plaid. However, it is specifically tailored to the Latin American market.

This adaptation allows Belvo to gather a broader range of data, better addressing the unique requirements of the diverse markets it serves.

Co-founder and co-CEO Pablo Viguera emphasized that Belvo’s ambitions extend beyond simply replicating Plaid’s banking API business.

Building a Comprehensive Finance API

Instead, Belvo intends to construct a finance API. This will incorporate more comprehensive data than typically collected by conventional systems.

Given the substantial underbanking and unbanking rates in Latin America, the acquisition of data from multiple sources is crucial.

Viguera stated that Belvo’s objectives align with those of Plaid in democratizing access to financial data. The company aims to empower users to control and share their data with whomever they choose.

Addressing Financial Activity in Latin America

Belvo operates on the understanding that a large portion of the region’s population, despite being underbanked, remains financially active.

The company’s objective is to connect various types of accounts. For instance, Viguera noted that some gig economy companies in Latin America issue cards enabling workers to receive payments at local stores.

Over time, these transactions generate data that can be integrated through Belvo, expanding the scope beyond traditional banking systems.

Platform Expansion and Growth

The company’s efforts to connect banks and non-bank institutions are central to its goal of enabling “any fintech or developer to access and interpret user financial data,” according to Viguera.

Belvo was founded in May 2019 by Viguera and co-CEO Oriol Tintoré. It participated in Y Combinator’s Winter 2020 program.

Since launching its platform last year, the company has established a customer base of over 60 companies across Mexico, Brazil, and Colombia. It currently processes millions of monthly API calls.

API Call-Based Revenue Model

Similar to other API providers, Belvo charges its customers for each API call they utilize, mirroring the business model of companies like Twilio.

Over the past year, Belvo has expanded its API coverage to encompass more than 40 financial institutions.

This expansion allows companies to connect to over 90% of personal and business bank accounts in Latin America, as well as to tax authorities (like the SAT in Mexico) and gig economy platforms.

Data Integration and Future Plans

Viguera explained that Belvo can transform unstructured financial data, such as information from gig economy platforms like Uber and Rappi, into bank-like data.

This enables third parties to make assessments as if the data originated from a traditional bank.

The startup intends to utilize the new capital to enhance its product offerings, broaden its geographic reach, and increase its workforce.

Specifically, Belvo plans to hire over 50 engineers in Mexico and Brazil by the end of the year. The company currently maintains offices in Mexico City, São Paulo, and Barcelona.

Furthermore, Belvo aims to launch its bank-to-bank payment initiation service in Mexico and Brazil.

Geographic Expansion

Belvo currently operates in Mexico, Colombia, and Brazil.

However, the company identifies significant opportunities in other Latin American markets, particularly Chile, Peru, and Argentina. Viguera indicated that expansion into these regions is planned for the future.

Fred Blackford, founding partner of Future Positive, believes Belvo presents a “truly transformational opportunity for the region’s financial sector.”

Nicolás Szekasy, co-founder and managing partner of Kaszek, highlighted the rapid growth in demand for financial services in Latin America.

He stated that Belvo is developing the infrastructure necessary for both established institutions and emerging players to successfully deploy their solutions. He also praised the team’s development of a sophisticated platform that effectively addresses complex technical challenges.