chile-based kredito raises $4m to help businesses get loans
Latin American SMB Lending Sees New Investment
Recent months have witnessed a significant surge in investment directed towards consumer banking startups throughout Latin America, all aiming to modernize conventional banking practices within the region.
However, a parallel shift appears to be occurring within the business banking sector as well.
Kredito Secures Pre-Seed Funding
Chile-based Kredito has announced the completion of a $4 million pre-seed funding round.
The company’s core focus lies in facilitating loan access for small to medium-sized businesses (SMBs).
Addressing the Credit Gap for Businesses
According to Sebastian Robles, co-founder and CEO of Kredito, a key issue is that businesses often possess bank accounts but lack access to credit facilities.
He further explained that in Chile, opening a business bank account typically doesn't automatically include a credit or debit card, forcing entrepreneurs to rely on personal cards for business expenses.
AI-Powered Lending Solutions
“A substantial ninety percent of our clientele currently lacks access to credit through their bank, despite maintaining an active account,” Robles stated.
“Leveraging the capabilities of AI, they can now gain access to working capital for the very first time.”
Kredito employs an AI algorithm to perform real-time loan underwriting.
This streamlines the process and connects SMBs with traditional banks that ultimately provide the funding.
Innovative Credit Risk Assessment
The company asserts that it utilizes “proprietary algorithms and alternative data to evaluate credit risk more inclusively than traditional banks.”
This methodology significantly accelerates loan approval times, which historically could take weeks or even months.
Data-Driven Model Development
During its beta phase, the company utilized data from over 10,000 SMBs to refine and train its AI models.
Revenue Model
Kredito generates revenue by acting as a lead source for traditional banks.
They receive a commission, a small percentage, for each loan successfully originated through their platform.
Expanding Product Offerings
Beyond its loan services, Kredito is currently developing a debit card product.
This product is anticipated to become available within the next few months.
Similar to other fintech companies in the region, Kredito is adopting a phased approach to product launches, introducing individual financial products without seeking a full banking license.
Strategic Approach to Banking
“Obtaining a banking license is prohibitively expensive, so we are strategically utilizing components of the existing financial ecosystem,” Robles explained to TechCrunch.
Growth and Customer Focus
Launched in March of this year, Kredito currently boasts a platform with over 2,000 active SMBs.
The company places a strong emphasis on delivering exceptional customer service, an area where traditional banks often fall short.
“The process of establishing a bank account for our startup proved more challenging than securing our initial angel investment,” Robles remarked.
“Despite holding $4 million in funds, I still lack a line of credit specifically for Kredito.”
Investment Details
The funding round included participation from a private VC fund managed by Maurice Khamis and Family, Link Capital Partners, partners from Patio Group, Karim Fajardin, and various family offices specializing in VC and fintech investments.