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BFD Expert Voices - Private Credit

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Felix Pago, which provides instant cross-border money transfers via WhatsApp, has raised $2.8 million in new funding led by Switch Ventures, the company tells Ryan exclusively.

Why it matters: Remittances to Latin America continue to grow, a trend bolstering the company's funding round and business growth.

Yes, but: Transferring money internationally remains a slow and costly process.

How it works:  To send cash, users register their WhatsApp number on the company's website and answer the Felix chatbot's question about their money transfer.

Once it's completed, they receive a payment link where users can share their debit card information.

For the recipient, funds are available instantly and can be sent directly to a bank account or to a Mercado Pago digital wallet, or they can be picked up in cash at multiple retail locations.

What they're saying: "[WhatsApp] is the operating system of the whole region, so we thought, why not build it on top of WhatsApp?" CEO Manuel Godoy says.

Between the lines: Checkout.com serves as the payment processor to initiate those transactions.

Miami-based Felix Pago uses crypto — specifically USDC stablecoins — to bypass traditional payment rails and facilitate those instant transactions.

It has also partnered with LatAm crypto firm Bitso to transfer funds to bank accounts in Mexico and UniTeller to provide cash payouts in retail locations and banks in regions where the crypto market isn't as mature.

Zoom out: Remittance flows into Latin America and the Caribbean increased by 11.3% in 2022 to reach $145 billion, according to the World Bank.

Many immigrants send money back home to support their families, but banks and other money transfer operators charge high fees and can have slow settlement times.

Zoom in: Felix Pago hopes to offer a fast, low-cost alternative with bank transfer fees at $2.99 and cash transfer fees at $4.98.

The company got its start serving mostly Mexican immigrants; the service recently rolled out in Guatemala and Honduras.

What's next: In addition to its text-based chatbot, Felix Pago is working on technology to enable users to send money via voice notes it calls "voice to remittance."

The startup is also looking to expand its service area, with plans to launch in Nicaragua and El Salvador next year.

Of note: The new financing is an extension to a seed round the firm announced several months ago and includes participation from H20 Capital, Mercado Libre, Wollef, Contour, TFC Ventures and several angels.

1 big thing: Remittance startup Felix Pago raises $2.8M 

Illustration of a cursor holding a stack of Mexican peso bills

💰 The hot new market in crypto? Trading FTX's carcass. (NYT)

The initial despair over FTX's failure has given way to a trading frenzy as major financial firms seek opportunity in the rubble of one of the worst business collapses in decades.

In total, $1b to $1.5b in FTX claims has changed hands since the bankruptcy began, according to Xclaim, a company that connects buyers and sellers.

2. Credit score

Illustration of a dart in the bullseye of a dartboard that says "credit score."

Want more fintech deals? Check out the Axios Pro Deals Tracker.

• Tres Finance, a crypto tax services startup, raised $11m in Series A funding led by Lightspeed's new fund Faction. New Form, Boldstart Ventures, Cyber Fund and Ambush Capital also participated. https://axios.link/3GP6zjO

• Strike Graph, a Seattle-based trust operations platform for security and compliance, raised $8.5m. Bamcap led and was joined by Madrona, Information Venture Partners and Rise of the Rest. www.strikegraph.com

• Salt Labs, a New York-based loyalty rewards platform for employees, raised $8m from Third Prime Capital. www.saltlabs.com

• Fiat Republic, a crypto-to-fiat BaaS startup, has raised $7m in a seed extension from Kraken Ventures, Fabric Ventures, Arca, Inovo.vc, Speedinvest, Credo Ventures and Seedcamp. https://axios.link/3GS8eFu

• Web3mine, a Liechtenstein-based crypto staking startup, has raised $6m in seed funding from 1kx, PL Ventures and angels. web3mine.io

• Hakbah, a Saudi financial savings platform, raised $5.1m in Series A funding. VentureSouq led and was joined by M-Capital, Bunat Ventures, Global Ventures and Aditum Investment Management. https://axios.link/4awKu7s

• Claim, a social network and rewards app, raised $4m in a seed funding round led by Sequoia Capital. Other investors include Susa Ventures, Box Group, 6th Man Ventures, Reflexive Capital, A* Capital, GSW Ventures and The Kraft Group. https://axios.link/3TAzAHw

• Crescenta, a Spanish digital fund manager that lets retail investors access private equity, raised €2m in new seed funding co-led by KFund and FJ Labs. https://axios.link/4av9MCU

• J.C. Flowers invested $125m into CFG Bank, a Baltimore-based lender focused on the health care and multifamily industries. www.cfg.bank

• Ampla, a New York-based cash flow management startup for consumer brands, closed a new $275m credit facility from Citi and funds managed by Waterfall Asset Management. https://axios.link/48tJWgN

• Aon (NYSE: AON) agreed to buy New York-based insurance broker NFP for $13.4b in cash ($7b) and stock from Madison Dearborn Partners and HPS Investment Partners. https://axios.link/3tpgXM8

3. Deals!

• Shara Chang, former chief legal officer at Divvy Homes, has joined Chime as chief compliance officer. https://axios.link/3NyaANa

• Greycroft promoted Nick Crance to principal. www.greycroft.com

4. It's personnel

☀️ Good morning, and happy Wednesday.

🥂 Situational awareness: This will be our last newsletter of the year, but we'll be back in your inbox on Jan. 2!

🥳 @Ryan is excited for a relaxing end to 2023.

Thanks to Michael Flaherty and Rob Reinalda for today's edits.

And thanks to you for reading. Please tell your fintech friends about this newsletter. They can sign up here.

December 20, 2023

1 big thing: Remittance startup Felix Pago raises $2.8M