Reliable transportation is at the top of every craftsman’s list, but it’s not always easy to provide in Latin America.
Chile’s Migrant is working to change that. Initially launched in Venezuela, now with $30 million in Series A funding and $80 million in lending facilitation, it is moving to both Colombia and Mexico.
In 2018, Ignacio Canal, Diego Fleischmann and Benjamin Isikson floated the idea of starting an e-commerce and lending company to supply durable goods such as cars, motorcycles and mobile phones to laborers in the Andean region.
He saw a lack of financial access for Venezuelans who left their country for others without financial support. Initially, Canals and Fleischmann created Migrante MVP to solve this problem and support them in the hiring process.
This is the second Canals company that previously founded Lemontek and was sold to KKR in 2019. Fleischman is a serial entrepreneur who founded the insurance company AVLA and sold it to DEG in 2019.
“We saw a huge opportunity to support immigrants,” said gaming-updates Channel. “We both believe in the value of immigrants and how access to finance allows them to seize opportunities.”
The company has chosen to develop secured loans for products that help borrowers increase their income, such as motorcycles, cars and trucks, and unlike its competitors that supply used vehicles, Canals Migrant provides new vehicles.
The channel said the team has built their online marketplace with built-in financial tools so they can control the entire customer journey.
People aren’t the only expatriates working to bridge the financial gap when making big purchases. Other startups, such as Mexico City’s Gravity, are also offering financial instruments – in the case of Gravity’s “buy now, pay later” – so people can buy home appliances if they’re low on capital.
Fleischman explained that Migrante’s loan model is different from its competitors because it uses work history and income information to determine what type of vehicle they need and whether they can repay the loan.
“We work in a place where processes break down,” Fleischmann said. “We sell expensive products that most people can’t afford without calling the bank, which is a very time-consuming process.”
Buying a car is often unaffordable, and the Migrant lending model and vehicle ties allow the company to offer an average annual interest rate of 26% compared to other car dealerships in Chile, where it often exceeds 30%.
Despite social unrest in Chile at the end of 2019 and then a global pandemic in 2020 and 2021, migrants saw some initial support as they began to borrow money, a market that grew from zero to dollars in gross trade value year after year. . became 30 million, a turnover of more than 700 units per month and a default rate of less than 1.5%. In addition, the company ended 2021 with 15,000 active customers and $25 million in deferred annual revenue.
As a result, they decided to push expatriates to other communities, including some banks, including in Peru. There Canals said the company is growing 30% month on month and is selling more than 200 units a month on average.
The company’s Series A was led by Kayak Ventures and included individual investors such as Creditus’ Sergio Furio, Betterfly’s Eduardo Della Majora and Affirm’s Huey Lin.
As mentioned, the latest funding will allow Migrante to launch and introduce new products in Colombia and Mexico, including car rental products and electric vehicle financing products.
The company is also increasing its workforce. Eighteen months ago, Migrant consisted of five people; Now it has 250 employees. He has added new employees to his management team, including Francisco Eterovic, former CEO of Credit; Alejandra Duran, former chief financial officer of Gelato; and Ignacio Gajardo, former CTO of the Chilean digital wallet MACH.
Cristobal Silva Lombardi, general partner at Kayak Ventures, said he has seen several fintech companies in the region and believes the Migrante model is unique in that it starts with a specific segment and drives customer acquisition rather than funding. Kayak has invested in previous Migrante rounds, including pre- and seed rounds, totaling $4 million.
“They can provide financing at the point of sale,” Silva Lombardi said. “These two men also have a lot of experience with different cycles. In Chile we had a major downturn in 2019 due to social unrest and then we had COVID, but their portfolio is performing very well and their track record has helped them grow in fashion with light assets. They started in Chile, in a competitive market, and are now expanding to Peru, Colombia and other parts of the region. There is a huge market ready to be blown up and they are counting on it to break in.”