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LATAM alternative SME lender a55 receives funding from Santander InnoVenture

a55Santander InnoVentures, Santander Group’s venture capital fund has announced that the group has invested in Latin American income secured alternative small and medium sized enterprise (SME) lender a55. This is the fourth investment made by the group in Latin America.

“The current crisis will accelerate shifting consumer habits to digital and subscription models. This will tremendously benefit software-as-a-service companies, which will need alternative financial services providers to support their growth and success. a55 is in a privileged position to support the Brazilian and Mexican companies with their financial offering, tailored to their needs and particularities, and built by entrepreneurs for entrepreneurs. We are excited to partner with Hugo and his team to put all our financial services expertise to their service,” said Manuel Silva Martínez, managing partner at Santander InnoVentures.

Through the partnership, Manuel Silva Martínez is to join a55’s board of directors and work together with the a55’s team to help expand their capabilities and product reach and explore areas for partnering with Banco Santander around the region.

Founded in 2016, by André Wetter and Hugo Mathecowitsch Brazil-based a55  provides solutions in the alternative lending space, offering revenue backed credit lines to recurring revenue companies. The company, starting with software-as-a-service (SaaS) businesses and aims to become the financing platform for service-based companies in Latin America. The FinTech recently launched operations in Mexico.

a55’s credit is flexible, transparent and designed for recurring revenue companies.Its technology solutions for borrowers include a credit monitoring dashboard, insights on revenue and cost metrics, integrated cash flow covenant management system and escrow and revenue lock up tools to redirect portion of the borrowers’ cash flows. For lenders, the company has developed a portfolio management and monitoring platform fed in real-time by transactional data.

Platform a55 links all banks and financial systems into a single dashboard. Its smart dashboard tracks cashflow in real-time and reduces churn rates, increases credit volume on-demand, and makes cash flow efficient. The company underwrites SMEs through a technology platform connecting bank accounts, escrow solutions, payment means, billing, and credit intelligence. 

According to company data, a55 has underwritten 50 companies in Brazil and Mexico through 350 different operations, with MXN 150 mn (c.€6 and $7 mn) in Mexico and BRL 100 mn (c.€17 and $19 mn) in Brazil with late payments below 4%.

“We began our journey in a kitchen trying to lend our own money with pen and paper to companies with no real assets to lend against. Two years after this first iteration, it is a great honor for us to partner with Santander InnoVentures to accelerate our growth in Latin America. InnoVentures is a reference in the fintech space with fantastic portfolio companies in Brazil, Mexico, Europe and the US we often benchmark ourselves against. Manuel sits at the board of such companies and will surely bring an enriching expertise to a55. That is a great milestone to be part of this inspiring Group and a proof that our team is working on a very promising product. Data is the new gold and fuels the new economy. We are building the platform of the future, where transactional and revenue data will drive credit decisions and shape the future of financial services,” said Hugo Mathecowitsch, CEO and co-founder at A55.

a55 is backed by institutional lenders in Brazil, Mexico, the US and France providing the platform with liquidity to lend to Brazilian and Mexican SMEs. Earlier, the company developed US$ 3 million in seed money from small Brazilian and international investors. Santander InnoVentures has been leading this round, which exceeds US$5 million in total from different investors.

This investment builds on Santander InnoVentures’ lenders’ portfolio, which includes direct lenders like Klar in Mexico, Kabbage in the US, and companies supporting lending processes like MarketFinance in the UK, Roostify (mortgages) and Autofi in the US.

Launched in 2014, London-based Santander InnoVentures is a $200 million corporate venture fund that partners with FinTech startups, providing funds, expertise and access to the Santander Group network. The funds are built on its philosophy of collaboration and partnership with small and startup companies.

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