Kaszek Ventures Invests $15M in Chilean Fintech Fintual

Latin American Retail Investing Receives Boost from Fintual's $15 Million Funding

Similar to developments in other financial sectors across Latin America, the retail investing landscape is undergoing significant change. This transformation is being driven by regional tech startups focused on broadening access to asset management opportunities.

Fintual, a Chilean-based startup, exemplifies this trend. The company recently secured $15 million in a funding round spearheaded by Kaszek Ventures, the largest venture capital fund in Latin America.

Democratizing Investment Access

Fintual operates as an automated, passive investment platform. It empowers individuals in Chile and Mexico to invest in mutual funds that incorporate ETFs (Exchange Traded Funds).

These investment vehicles, while common in other markets, have historically been less familiar and harder to access for investors in Latin America.

“Our core mission is to provide individuals with long-term investment opportunities and access to instruments previously unavailable to them,” explained Pedro Pineda, co-founder and CEO of Fintual.

From Astronomy to Fintech

Prior to establishing Fintual in 2018 alongside his three co-founders, Pineda had a diverse background. He was initially a professional astronomer and also founded a Groupon-like company in Chile called “Queremos Descuentos” (We Want Discounts).

He successfully sold this venture for just over $1 million at the age of 28.

Following the sale, Pineda experienced a period of uncertainty before discovering his next passion.

“I resolved to dedicate myself solely to pursuits I genuinely enjoyed, collaborating with individuals I valued,” he stated.

He spent a couple of years traveling and acquiring new skills, including coding, before Omar Larré, Fintual’s current CIO, presented him with the foundational idea for the business.

Identifying a Market Gap

Larré, formerly a portfolio manager at Banco Itau, Brazil’s largest bank by assets, recognized a significant deficiency in the market.

Investing was not designed with the average person in mind. High annual fees, substantial minimum investment requirements, and penalties for early withdrawals were common barriers.

Furthermore, navigating the investment process demanded a level of financial expertise that many individuals lacked.

Pineda also saw the potential for disruption within the financial sector, viewing it as an exciting challenge.

“I was drawn to the prospect of challenging established financial institutions, and technology is the key to achieving that. We possess tools that previous generations didn’t have, enabling us to revolutionize an entire industry,” Pineda shared with TechCrunch.

A More Accessible Investment Model

Traditional mutual funds in Chile and Mexico typically impose annual fees ranging up to 6.45% and 5%, respectively.

In contrast, Fintual charges a significantly lower annual fee of 1% of assets managed.

Additionally, Fintual eliminates minimum investment amounts and time commitments, allowing users to withdraw their funds at any time without incurring penalties.

“Investment levels in Chile are considerably lower than those in the U.S., potentially by a factor of ten,” Pineda noted, highlighting the difference in investment rates.

Rapid Growth and Expansion

In 2018, Fintual was accepted into Y Combinator, becoming the first Chilean startup to participate in the renowned accelerator program.

Since then, the company has experienced exponential growth, currently serving 57,000 clients across Chile and Mexico.

The following table illustrates their growth trajectory, including assets under management and annual growth rates:

	Assets Under Management (USD)*	Annual Growth
May 2018	1.2 M
May 2019	12.9 M	1075%
May 2020	87.6 M	679%
May 2021	480.7 M	548%

*Each figure represents the value at the end of the corresponding month.

The newly acquired funding will be allocated to expanding operations in Mexico, extending the company’s reach to Colombia and Peru, and bolstering its technology team.

Investor Confidence

In addition to Kaszek Ventures, Fintual’s investors include YC, ALLVP, and prominent angel investors such as Jean-Denis Greze, CTO of Plaid, and Oskar Hjertonsson, founder of Cornershop.

To date, the company has raised a total of $15.2 million.

Nicolas Szekasy, co-founder and managing partner at Kaszek, emphasized the fund’s long-standing interest in Fintual. He was particularly impressed by the team’s identification of a specific market niche and the exceptional user experience they have cultivated, which has been instrumental in driving the company’s growth.