Google invests in embedded lending fintech R2 from Latin America
Latin American
embedded lending fintech R2 has raised US$15mn in a Series A funding round led
by Google’s AI-focused venture fund, Gradient Ventures, just seven months after
completing a seed round.
Source:
Fintech Magazine
R2, an
embedded lending fintech from Latin America, has received US$15mn of Series A
investment led by the AI-focused venture fund of search giant Google.
The Mexico
City-based startup offers a white-label solution that allows brands to easily
embed lending experiences into their digital platforms using R2’s APIs. Over
the past year, the fintech has partnered with some of the region’s largest
technology platforms, financed over 3,000 small businesses and grown monthly
revenue by a factor of more than 20.
The fintech
plans to use the latest capital raise to expand its workforce, recruiting for
roles within engineering, product development, data and risk, finance and
compliance, and new business. The Series A round also features participation
from new investors Femsa Ventures and PayU, as well as some angel investors. It
reportedly leaves R2 with a valuation of US$100mn.
Google
investment gives R2 fintech ‘confidence to scale’
“It is a
testament to our mission, progress and team that amidst market turbulence and
fundraising uncertainty we were able to achieve this milestone,” say R2
founders Roger Larach and Roger Teran. “In Latin America, 87% of credit demand
by small businesses is unmet – in tough times like these, capital becomes even
more scarce. But technology platforms such as POS systems, payment processors
and marketplaces have accumulated reams of underwriting-rich data, paving a new
road to reach these small and medium businesses.”
Larach and
Teran describe R2 being at “an inflection point”, with more businesses ready to
realise the customer retention gains and additional revenue streams that come
with embedding R2 into their platforms.
“We are just
getting started,” Larach and Teran say. “Small businesses in Latin America
still face a US$1.2tn credit gap. As more businesses go online and transact
digitally across the region, we are well positioned to leverage new data
sources to further improve our underwriting capabilities. More importantly, by
virtue of already analysing millions of small businesses and financing
thousands of them in such a short period of time, we’ve accelerated our
learning process to reach even more SMB customers through the platforms we work
with.
“As we accumulate more data, we feel particularly fortunate to partner with Gradient in this round. Gradient’s deep expertise in machine learning and AI – which drives our risk management lifecycle – and the institutional resources they bring from Google position us well to continue to provide greater access to capital to previously overlooked-but-resilient small businesses. We’ve never been more steadfast about our mission and confident in R2’s ability to scale its impact to millions of small and medium businesses across Latin America and beyond.”