Grupago – a fintech company that is pioneering digital microcredit for small to medium-sized businesses (SMBs) in Latin America – announced that it had secured $4.3 million in seed funding. Deciens Capital led this funding round, and Precursor Ventures, Clocktower Ventures, Twine Ventures, and other venture funds joined them. They were also joined by several super-angels across the US and Mexico, including Zac Bookman (CEO of OpenGov), Oso Trava (Cracks Fund), Pepe Shabot (CEO of ION Mexico) and Paul Sawaya (co-founder of Human Interest).
Grupago launched its micro-credit business in October 2023 to fill gaps in Latin America’s small business market, providing credit to millions of small business owners across the region.
Fintech companies have not been able to overcome the challenges of reaching, underwriting, and collecting for the SMB market in the LatAm region. At the same time, traditional lenders depend on expensive brick-and-mortar infrastructure. This drives up loan costs and limits reach.
Grupago overcame these issues and effectively served micro-SMBs by combining three key innovations: AI-driven underwriting, group collateral, and community distribution. This is all available in a fully digitalized offering.
1.) AI-driven underwriting—Grupago taps into the power of AI, including non-traditional data sources, to underwrite small loans. Over time, it systematically expands credit limits as customers demonstrate successful repayment histories.
2.) Group collateral – Borrowers collaborate as part of lending groups and co-sign for each other’s loans. And after a payment is missed, other members are responsible for repayment. This approach enables Grupago to profitably collateralize an otherwise uncollateralized customer segment and build more underwriting data than individual loans.
3.) Community distribution – Grupago acquires online community leaders who build lending groups within their local communities. This enables the company to reach rural and otherwise hard-to-reach customers via its unique and cost-effective online-to-offline acquisition approach.
Grupago is currently active in Mexico and seeks to scale across Latin America over time. The first focus is on a group loan product focused on women entrepreneurs.
KEY QUOTES:
“Latin America has been experiencing a true renaissance in its financial services infrastructure and offerings. Our approach builds on cutting-edge AI and non-traditional data sources while applying group lending techniques first developed by Nobel-prize winning research pioneered by Muhammad Yunus in Bangladesh. Our vision is to focus on one of the most important, yet simultaneously overlooked, market segments – micro-SMBs – to ensure these entrepreneurs can quickly and easily access low-cost capital, in a fully digital experience, that helps their businesses thrive.”
– Grupago founder and CEO Uri Pomerantz
“Grupago and its founder Uri are emblematic of the types of innovators Deciens dreams of working with. Not only are Uri and his team working to expand financial access to underserved communities – a value we hold near and dear – they are also deeply curious and tirelessly collaborative, which allows us to be their partner in building their game-changing solutions.”
– Deciens Capital founder and managing partner Daniel Kimerling
