Mendel Raises $35M to Revolutionize Corporate Spend in Latin America

Mendel Secures $35 Million to Revolutionize Corporate Spend in Latin America

Mendel, a spend management solution designed for enterprises throughout Latin America, has recently announced the successful completion of a funding round totaling $35 million. This investment is comprised of both debt and equity financing.

Series A Funding and Debt Financing

The Mexico-based startup finalized a $15 million Series A funding round alongside a $20 million debt financing facility. This achievement follows the company’s participation in the Y Combinator Winter 2021 program.

ALLVP and Infinity Ventures jointly spearheaded the equity investment. A diverse group of angel investors also contributed, including prominent figures like Thejo Kote (Airbase founder and CEO), Matias Woloski (Auth0 co-founder and CTO), Pedro Arnt (Mercado Libre CFO), Federico Ranero (Kavak COO), and Keri Gohman (Bain Capital).

Existing Backers

Better Tomorrow Ventures, Broadhaven, and Magma Partners are also among the companies supporting Mendel’s growth.

Reinventing Corporate Spend Management

Mendel’s core objective is to fundamentally change how enterprises manage their spending. The company aims to automate many of the manual processes currently handled by CFOs. Essentially, it strives to become a comprehensive platform for all B2B expenditures.

Alan Karpovsky and Alejandro Zecler, both experienced entrepreneurs with prior startup exits, founded the company. They were later joined by Helena Polyblank (CPO) and Gonzalo Castiglione (CTO) as co-founders.

The Innovation Gap in LatAm CFO Functions

“In Latin American enterprises, the CFO function demonstrably lags behind in terms of innovation,” stated Karpovsky. “While CMOs benefit from media optimization tools and CTOs have access to advanced coding frameworks, CFOs often rely on spreadsheets, ERP systems, and, in some cases, even fax machines.”

A Competitive Landscape

The corporate spend space is becoming increasingly competitive. Companies like Ramp and Brex have secured substantial funding this year, while TripActions has expanded its services beyond travel. The acquisition of Divvy by Bill.com further illustrates this trend.

However, Mendel positions itself as more akin to Airbase, a U.S.-based corporate spend startup that recently raised a $60 million Series B round led by Menlo Ventures, with its CEO also serving as an investor.

Focus on Enterprise Solutions

“Currently, our solution can be described as ‘Ramp for Latin American enterprises’,” Karpovsky explained to TechCrunch. “In the U.S., many companies target startups and SMBs. We are specifically focused on delivering enterprise-level solutions for larger organizations where CFOs prioritize efficient spending control over cashback rewards.”

Mendel’s Software Capabilities

Mendel’s software empowers finance teams to monitor card transactions in real-time, establish detailed spending policies, and track expenses from a centralized dashboard. Future development plans include automating accounts payable, providing employee cash advances, and offering factoring services.

Strategic Customer Acquisition

Mendel’s strategy centers on attracting clients with significant payment volumes and minimal credit risk, while simultaneously charging a SaaS fee for platform access. The company, currently focused on the Mexican market, has experienced rapid growth, onboarding over 150 clients – including Mercado Libre, PetCo, and Telcel – since its launch earlier this year.

The startup reports a 100x increase in payment volume (GTV) over the past three months, with current payment volume growing at a rate of 2x week over week, according to Karpovsky.

Untapped Potential in the Mexican B2B Payment Market

The company believes the B2B payment market in Mexico presents a substantial opportunity, particularly given the relatively low adoption of card payments. Karpovsky noted that traditional banks and American Express have not expanded their market share in the country for several years.

Future Growth and Expansion

Currently employing 70 individuals, Mendel anticipates expanding its workforce to 200 by the end of 2022. The newly acquired capital will be allocated to significant investments in product development, including expanding into broader B2B payment solutions, as well as marketing and brand awareness initiatives.

Funds will also be directed towards the development of new business areas and strategic partnerships.

Investor Confidence

Mendel’s investors express strong confidence in the company’s potential.

Federico Antoni of ALLVP stated that his firm has been actively monitoring the corporate spend and financial services sector for years, recognizing its significant potential within Latin America.

He was particularly impressed by the team’s vision to “create the next Nubank for corporations.”

“The mission and vision of Mendel immediately resonated with us,” he shared with TechCrunch.

Democratizing Access to Financial Tools

Mario Ruiz of Infinity echoed this sentiment. “In Latin America, larger enterprises are underserved by existing providers, and Mendel is democratizing access to cutting-edge software and payment solutions,” he explained via email. “Drawing parallels with the success of other corporate card and expense management startups globally, we are confident that Mendel possesses the team, technology, and determination to become the leading provider in Latin America.”

Addressing a Critical Need in LatAm

Sheel Mohnot of Better Tomorrow Ventures highlighted that his firm was attracted to invest in Mendel because its “product is genuinely essential” in Latin America, where “no other company is addressing” this specific challenge.

“We’ve observed considerable success with this model in the United States, and the need is even greater in Latin America – companies don’t routinely issue cards to all employees, and robust spend controls are paramount,” he said. “This team has a proven track record of building a successful business in a similar space and had already secured Mercado Libre as a customer prior to our leading the seed round.”