Axios Pro: Fintech Deals

April 02, 2024

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1 big thing: Palenca gets funding from Experian

Illustration: Eniola Odetunde/Axios

Palenca, a LatAm-based income and employment verification startup, received a round of strategic funding from Serasa Experian, the startup tells Ryan exclusively.

Why it matters: By providing banks with consumer income data, the company hopes to expand access to credit products in Latin America.

How it works: Palenca has built an API that enables banks and fintechs to verify income details and employment history for salaried and gig workers in Latin America.

  • The company partners with local payroll providers and employers, entering revenue-share agreements with them to access workers' employment data.
  • Palenca's customers then use that data to help in their underwriting processes for various financial products, including credit cards, mortgages, auto loans and payroll lending.

Between the lines: Unlike other income verification API startups, Palenca does not rely on consumer credentials to access their payroll accounts.

  • "We build direct integrations with the payroll systems, so we have real-time income information," Palenca founder José Carlos Aguilar says.

State of play: Palenca's coverage now reaches more than 100 million workers in Mexico and Brazil, and it has serviced more than 4 million consumers seeking access to financial products in those markets.

  • "Our vision is to expand consumer lending as a percentage of GDP," Aguilar says.

Between the lines: The funding by Serasa Experian, the leading credit bureau in Brazil and a division of Experian, brings the total funding the startup has raised to $5 million.

  • As part of the deal, Serasa Experian will resell Palenca's income verification product alongside its services in Brazil, enabling banks to access both credit and income data through a single API.

Flashback: In early 2022, Palenca raised $2.6 million from investors that include Gilgamesh Ventures, Foundation Capital, Y Combinator and 500 Startups.

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