Business Startups Venture

Klar Raises $57.5M In Debt & Equity To Become The ‘Chime of Mexico’

Illustration of smartphone with money attached. [Dom Guzman]

Klar, a Mexico City-based startup that wants to democratize banking services in Mexico, has raised $57.5 million in debt and equity seed funding with the goal of becoming the ”Chime of Mexico,” among other things.

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Specifically, the digital banking startup raised $7.5 million in equity and $50 million in debt financing, according to CEO Stefan Moller. San Francisco-based Arc Labs provided the debt portion.

Washington, D.C.-based Quona Capital led the round, which Moller believes to be one of the largest seed rounds ever recorded in Mexico. (Crunchbase data supports this, according to our data specialist Jason Rowley, who ran this query).

London-based Santander Innoventures,  aCrew Capital – a new firm that was  spun out of Palo Alto-based Aspect Ventures (which invested in Chime’s Series A and Series C rounds) by Theresia Gouw, New York-based FJ Labs, and Western Technology Investment out of California also participated in the financing.

Notably, the investment marks Aspect Ventures’ first outside of the U.S., according to Moller.

In conjunction with the funding announcement, Klar also launched its free service today. The company’s ultimate goal is to offer Mexicans an alternative to traditional credit cards and debit services.


Moller founded Klar about 10 months ago along with CFO Daniel Autrique, a Mexican economist and Stanford University graduate; and Gianluigi Davassi, CTO, who helped build German digital bank N26 (valued at more than $4 billion).

Klar Co-founder and CEO Stefan Moller

The Mexican market opportunity in the space is huge, according to Moller, considering that an estimated mere 15 percent of adults in the country own credit cards. (Another source pegged the number of Mexicans aged 25 or older owning a credit card as of 2017 as low as 9.22 percent).

“I think our opportunity in Mexico is even greater than what Chime has done in the U.S. because if you think about it, about 50 percent of the population doesn’t have a bank account,” Moller told Crunchbase News. “Chime has done a phenomenal job in a market where people have access to bank accounts. Here in Mexico, we have that target market plus the 50 percent of people that don’t have a bank account.”

In addition to its headquarters in Mexico City, Klar has an engineering team that works out of Berlin. The company currently has about 25 employees, with engineers outnumbering “business people,” a fact that makes Moller “very happy.”

He acknowledged that Klar is in its early stages.

“We want to build a bank and there’s a lot of work to be done on the product side,” he said. Currently, the company is offering a debit account with cashback returns for the user that allows for transfers to account holders at other banks. Klar is also offering a revolving credit line.

“We’re betting on this in the near future to lead the company’s growth,” Moller told Crunchbase News. “Demand for credit is considerable here and few people have access to credit with humane rates.”

For example, its credit lines will have interest rates ranging in the “mid-40s,” said Moller, which may sound like a lot to those in the United States, but it’s still much lower than the average 60 percent interest rate on credit cards in Mexico.

What’s worse, according to Moller, is that such a small segment of the population doesn’t even have access to a credit card.

“The remaining 85 percent have to borrow with interest rates as high as the 1,000s,” he said. “We think credit is very blurry in Mexico and credit instruments are fairly difficult to understand.”

As such, Klar aims to offer its services and products with “clarity and transparency.” For example, if a consumer wants to buy a television set for $200 and use a revolving credit line with Klar, the company will give that person the option to pay back the money with the amount owed varying depending on the amount of time it takes the person to repay the loan.

“Instead of talking interest rates, we want to talk on their terms,” Moller said.

Investor Point of View

Santander InnoVentures, the $200 million corporate venture fund of Spain’s Banco Santander, has also put money in Curve out of the United Kingdom, Creditas in Brazil, and bonify in Germany.

Manuel Silva Martínez, partner and head of investments at Santander InnoVentures, said that overall, the fintech sector in Mexico is “booming, reaching levels of quality and sophistication that, for those of us who have been following the market for nearly a decade, are very encouraging.”

The country has seen a rise in both the number of fintech companies and inflow of VC money into the country over the past three to five years, wrote Martínez in an email to Crunchbase News. Martínez also joined Klar’s board with the funding round.

“The proportion of foreign capital from Tier I funds coming into the country as a percentage of the total invested capital is growing fast, showing there is international recognition of Mexico as a promising market,” he wrote. “Teams of the earlier stage startups are increasingly international, showing Mexico is a good place to be an entrepreneur.”

The country’s recently-passed  “Fintech Act,” shows that the Mexican government is paying attention to the industry “and that there is a will to create a common framework for fintech innovation to flourish further,” noted Martinez despite the measure still being under discussion among industry stakeholders.

As for Klar, the company has a number of unique factors that Santander finds very attractive, he said.

“First, I haven’t ever seen a team with such pedigree in Mexico, with loads of international talent, and people coming from large, successful tech companies such as Google and Uber,” Martinez said. “Plus, the product is amazing, from a design perspective and from its novelty in the broader offering available to customers in Mexico.”

Growing Interest In The Region

The funding is illustrative of two phenomena we’ve reported on this year: for one, Latin America as a whole is seeing increased global VC interest. And with a growing number of global investors (like SoftBank) putting money into the region, it seems to have turned a corner in terms of its maturity.

Secondly, VC funding into Latin America is growing, a lot. According to The Association for Private Capital Investment in Latin America (LAVCA), venture funding into Latin American countries nearly doubled in 2018 to a record $1.98 billion compared to $1.14 billion over 2017. Mexico was the second most active market by number of deals (95 startup investments totaling $175 million), according to LAVCA’s data, as you can see in the chart below.


Illustration: Li-Anne Dias

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