Following its launch six years ago, Bitso, a cryptocurrency exchange and financial services platform based in Mexico, has announced the successful completion of a $62 million funding round. This investment is intended to support the company’s expansion as investors anticipate a surge in cryptocurrency adoption throughout Latin America.

The three leading cryptocurrencies are currently experiencing positive trading momentum in the final months of 2020, with Bitcoin’s value approaching, and in some cases surpassing, its previous peak levels. The increasing global acceptance of these digital assets and their potential within developing economies has attracted the attention of forward-thinking financial services investors, such as the firm QED Investors, established by the creators of Capital One. Consequently, QED Investors partnered with Kaszek Ventures, a prominent Latin American investment firm, to provide funding for Bitso’s $62 million financing round.

Bitso is already a major cryptocurrency platform in Latin America, serving 1 million users, primarily in Mexico and Argentina. It is also one of the few platforms to hold a license under the Distributed Ledger Technology (DLT) framework from the Gibraltar Financial Services Commission (GFSC).

The company was founded by Ben Peters, Daniel Vogel, and Pablo Gonzalez, and has established a leading position in the Latin American cryptocurrency market. However, it has also faced challenges related to issues common within the cryptocurrency sector.

A Reuters report identified Bitso as one of the platforms utilized by individuals involved in illicit activities, such as Ignacio Santoyo, a human trafficker, for money laundering purposes.

Bitso’s founders and investors are focused on the potential of cryptocurrencies to simplify and reduce the costs associated with financial services, particularly for middle-class and low-income individuals who are often underserved by traditional financial institutions.

“We recognized that cryptocurrency was not a fleeting trend but rather a maturing asset class,” stated Nigel Morris, a co-founder of QED, who previously held a leadership role at Capital One. “Its staying power is evident, and it enables a range of financial services, including lending and cross-border money transfers. This is now a tangible and established phenomenon.”

For these reasons, Latin America presented a significant opportunity for QED Investors to make its first investment in the cryptocurrency space, and Bitso was selected as the initial recipient of that investment.

“This company possesses a strong business model, a talented team, and operates within a region we understand well,” Morris explained. The firm has previously invested in companies like Coru and Confio and is confident in the potential of financial services startups in Mexico.

Bitso aims to provide Latin American investors with access to foreign currencies, such as the U.S. dollar, through stablecoin offerings, alongside services like lending and cross-border remittances, in addition to its existing peer-to-peer transaction capabilities.

Currently employing 200 people, Bitso plans to use the new funding to expand rapidly throughout Latin America, with Brazil being its initial target market. Brazil, as the largest market in the region, represents a substantial growth opportunity for Bitso, according to co-founder Daniel Vogel.

“We are achieving success in developing products where the core value proposition is not simply exposure to Bitcoin or other cryptocurrencies, but rather realizing the potential of making crypto genuinely useful,” Vogel said. “Both of these investors bring considerable expertise in the fintech and traditional financial services sectors, and we are eager to continue developing innovative projects. We have been actively working on solutions that leverage technology to provide valuable services to end-users and building products along those lines.”

Bitso is already processing $1 billion in remittances for its customers, facilitating transactions for financial services partners, including cryptocurrency-based money transmitters.

Vogel initially connected with QED and Kaszek during the early stages of Bitso’s development, while operating from a shared workspace with five other companies. “I even had to ask my team to leave a meeting because we only had one room available,” Vogel recalled.

With a current customer base of 1 million, the company intends to add another 1 million customers in Brazil with the help of the new funding.

He believes that access to stablecoins will be a key driver of growth. “The considerable uncertainty in the market led many people to seek the dollar as a safe haven for their assets,” Vogel stated. “Demand for access to dollars has increased significantly over the past year.”