Exclusive: Graviti Banks $2.5M Seed To Offer Appliance Buy Now, Pay Later in LatAm

Graviti is developing a buy now, pay later concept aimed at millions of low-income, unbanked families in Latin America for whom purchasing home appliances is difficult.

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“We have a specific focus to help more than 100 million households have access to appliances, like water heaters and washing machines,” Yusef Jacobs, co-founder and CEO told Crunchbase News. “The true problem is the financial gap — they cannot afford to pay up front for these purchases, and because they are unbanked, have no access to loans. On the other side, big and small merchants can’t access this market.”

The Mexico City-based company, which was founded in late 2019, raised $2.5 million in a seed round led by Active Capital. Other backers in the round included Mucker Capital, Clocktower Technology Ventures, Kevin Patrick Mahaffey and Matt Brezina, as well as a group of additional investors. With the new funding, Graviti raised approximately $3 million in total, which includes pre-seed funding from investors, such as 500 Startups, Jacobs said.

Active Capital’s founder and CEO Pat Matthews said in an interview that he connected with Jacobs after reading about the company in a bank newsletter.

“Overall, the buy now, pay later strategy helps you buy things you don’t need, but the mission of Graviti is to help people buy what they do need,” Matthews added. “They have a great sense of what the customer needs and have proven out the model. I also love the conversational commerce and support provided through WhatsApp. Graviti is the full package.”

In 2020, Graviti focused on water heaters. More than 15 million households, just in Mexico, don’t have a way to safely heat water, he said. Through the platform, customers buy basic appliances with financing, even if they don’t have a bank account, and can pay in weekly, bi-weekly or monthly installments without down payments or late fees.

Facilitating the customer experience through WhatsApp mimics the conversation customers would have with local merchants, and they don’t have to download a new app because most smartphones in Latin America already come with it included, Jacobs said.

The new funding will enable the company to come out with new capabilities this year to add washing machines, dryers and refrigerators, essentially a new product every two months.

It will also provide lending capital for the company to help customers purchase the appliances. Loans for appliances is just the first step in bringing financial security to families, Jacob said.

The company continues growing fast, Jacobs said. In March, Graviti made 190 loans and was closing out April with more than 300 loans. He expects that loan figure to surpass $1 million since the company first began lending. In addition, Graviti is consistently earning $50,000 in revenue each month.

“We will be like a credit card for them,” Jacobs said. “We see providing access to loans as the perfect first step. The best way we can help them to build credit is by underwriting loans for things they need for their home. They are building a good credit history, which will reduce their financial insecurity.”

Illustration: Li-Anne Dias