B2B startup Buy Now, Pay Later Keo World signs credit facility agreement worth up to $500 million

Today, Miami-based fintech Keo World announced a seven-year credit facility of up to $500 million from UK-based alternative asset management firm Hayfin Capital Management LLP. The startup, which focuses on the B2B market, plans to use this investment to expand its services in Mexico.

Since its inception in 2020, Keo World has grown to serve 12,000 businesses in six countries. Its Workeo product issues virtual American Express cards to small and medium-sized enterprises (SMEs). If these SMEs successfully pass a digital approval process, they then receive a line of credit.

“We are thrilled to have this funding agreement which will allow us to extend the reach of our B2B sourcing funding program to businesses across Mexico,” Keo World Founder and CEO Paolo Fidanza said in a statement. a statement.

It is notoriously difficult for SMEs to access capital. The good news for these companies is that there is an emerging industry of startups working to solve these problems.

“In a market where less than 12% of total traditional credit is extended to SMBs, our Workeo product allows professional buyers to access key inventory on credit and suppliers to increase recurring sales,” continued Fidanza. “Our product improves working capital management through a fully digital, frictionless, low-cost inventory financing platform through the American Express network.”

Mario Luna, Vice President Global Network Partnership Latino América at American Express, highlighted the important role SMEs play in Mexico’s B2B payment ecosystem. “This agreement allows for continued product development and increased volume so that we can continue to help these companies grow,” Luna commented in a statement.

There is no denying that the Buy Now, Pay Later (BNPL) market is large and growing. Europe’s largest fintech is Klarna, which now sits at a $46 billion valuation. PayPal recently acquired Paidy for $2.7 billion, while Square investors approved the takeover of Afterpay for $29 billion.

Why this sudden interest? In short, the pandemic has pushed consumers to shop online, and the habits have remained. Simultaneously, Millennials and Gen Z consumers, who are more likely to shop online in the first place, now have more purchasing power than ever before. 2.1% of global e-commerce transactions in 2020, or nearly $100 billion, passed through BNPL. That’s a pretty penny if you consider that BNPL companies typically charge merchants between 2% and 8% of the purchase amount to give shoppers the privilege to defer payments.

Client late fees are another source of revenue for some BNPL companies. The fee is one reason UK consumer advocacy group Which? called for increased regulation of the BNPL industry. According to Which?, around a quarter of consumers end up spending more than they intended due to BNPL’s ease of use. That said, the BNPL industry is here to stay. And with Latin America’s rapidly expanding middle class and vibrant fintech scene, Keo World’s bet on the region may well pay off.

PHOTO at top of post: Paola Fidanza and Veronica Crisafulli, founders of Keo World.

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Riley Kaminer
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