This morning Clara, a Latin American market-focused corporate spend management startup, announced its product launch and a $ 3.5 million pre-seed round led by General Catalyst.
Funding for the company caught TechCrunch’s eye as a large amount of funding was made available to related companies serving the US market. From Divvy to Brex, Ramp, Airbase to Teampay, investors have poured capital into startups to help companies better track and manage their spending.
Firms in the fintech niche can make money in two ways: exchange sales and software revenue. Or more simply put, some in the Business Spending category generate revenue when users swipe cards and earn a portion of the transaction. Some also charge for the software they have wrapped around their cards and other payment methods.
According to Gerry Giacomán Colyer and Diego Iván García Escobedo, the co-founders of the company, Clara is in the first warehouse and today receives her income from exchange income. Colyer is the company’s CEO, while García Escobedo leads product and technology work.
The couple told TechCrunch that the Mexican exchange market is more similar to the U.S. (lucrative) than the European (less lucrative) market, meaning the company can attract a wide variety of customers for its free service – empieza hoy – sin costo , intoned its website – it could be seeing the same revenue growth that drove some of its American companies to venture out into huge ventures.
The startup’s potential caught the eye more than General Catalyst, a well-known venture capital company. The two co-founders of Ramp are also investors in Clara. The launch round also included funding from a variety of smaller firms and angels, including Canary Ventures, Adapt Ventures, and Picus Capital.
The co-founders aim to fill the technology-based financial services void they found in Mexico. Colyer worked for G2 after a stint at Stanford, eventually returning to Mexico and working on a micromobility startup called Uva Scooters. During the process, he found that Mexican and other Latin American companies were missing some digital tools, such as low-cost, low-cost corporate spending software that American companies had ample access to.
The founding couple, who met at Grin Scooters, who had taken over Uva, set out to build Clara and optimize a model with proven success in America for work in Mexico. What kind of optimization was required? Local compliance to ensure high levels of card acceptance, support for local tax law and receipt management, the couple said.
So far, the company has only worked with around 100 customers. The co-founders told TechCrunch that they have caught on with high growth companies, some of which are startups. That reflects what Brex drew on when it was a more youthful upstart itself.
Today the company only operates in Mexico, but intends to serve other markets over time.
In relation to the $ 3.5 million increase in the company, like many pre-seed and seed deals, the funds were acquired in several tranches, including one in May 2020. The remainder of the capital came later in the year.
Seeing successful startup models known in the US emerge in Latin America is a regular trend. Belvo, for example, is following the tracks laid down by Plaid and bringing fintech APIs to the LatAm market. With the proliferation of smartphones and the increasing use of cards, Clara may find a good solution for her home market.
Looking ahead, TechCrunch is curious how quickly Clara can attract new client companies after it is officially launched. If this is possible and the exchange game proves successful, then you can expect to hear about it again soon.
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