QR payment system based in Mexico, Dapp, has raised funds of $12.4 million dollars in its series A funding round. In less than a year, Dapp has managed to bring on 20,000 businesses and is expecting to reach 240,000 more. The funding was raised from primarily two mutual funds, G2 Momentum capital, and Kalonia Venture Partners.
What is Dapp?
Dapp is a financial technology company. It specializes in the interoperation of payments between users, banks, and merchants. Businesses can use Dapp to accept QR payments from millions of e-wallet users. Dapp claims this is a more economical and secure method of payment. Through E-wallets users can conduct contactless transactions at thousands of acceptance points across Mexico. The company provides businesses with a transaction management portal that allows for greater visibility of transactions and the movement of funds. Through Dapp's transaction center, businesses can get access to advanced reporting that is focused on empowering businesses with data to make decisions. Dapp provides a payment ecosystem for uses, banks, and shops.
What will Dapp do with the $12.4 million
Dapp plans to use the $12.4 to further establish its presence in Mexico and to expand throughout Latin America. The company will continue its strategic partnership with existing wallets in Mexico like Kueski, Broxel, Claro, and Bitso. Dapp had originally started out as a wallet. However, it has rapidly evolved into a connection point between SMEs, large companies, and users. Founders Antonio Peláez, Jorge Alfaro, and Sergio Blando, have said that they will mainly use the capital to advance in Mexico but have not ruled out thinking about expansion in Latin America.
Fintech in Mexico
As of February 2021, there were 440 fintech startups based out of Mexico. Internet penetration in Mexico is growing rapidly however bank account penetration remains low. This has created an opportunity for startups looking to provide financial services to a population that is increasingly online but may not have a bank account. The largest segment of fintech in Mexico by the number of startups is 'payments and remittance', while 'digital banking' is the segment with the highest growth rate. Mexico has emerged as one of the main fintech ecosystems in the Americas.
Dapp isn't the only Mexican fintech making headlines. Recently, Clara raised USD 30 million in its Series A with a goal to target Brazil's corporate market. Clara provides startups in Mexico with corporate cards. After this round of fundraising, the company has been valued at $130 million. Along with the investment, Clara has also secured a revolving debt facility of $50 million.
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Featured image: Dapp
1. Mar 2021, A.M.Rios, "Fintech in Mexico - Statistics & Facts", Statista, [available online] available from: https://www.statista.com/topics/5277/fintech-in-mexico/ [accessed Jun 2021]