Vexi , a Mexico-based neobank, has raised USD 8 million in a round led by Magma Partners , along with previous and new investors like Redwood Ventures . Vexi plans to utilise the fresh capital to expand its client base, hire more employees to strengthen the team, and improve its unique technology stack and risk algorithms.

With over 1 million credit card applications, a healthy loan book, and Unit Economics, Vexi has been a pioneer in creating a market for this sort of product. In addition, the firm has been able to combine minimal operating expenses with an appealing value proposition for clients, which includes American Express brand credit cards, interest-free installments, rewards, purchase insurance, and low-interest rates. Vexi is changing the face of credit in Mexico by providing underbanked Mexicans with credit as well as education to help them establish their credit history and better their economic status.

For the time being, Vexi is mainly interested in the Mexican market, which has a population of about 127 million people. It eventually intends to grow beyond the country's borders into other regions of South America. Credit card access in Mexico Credit card ownership is far more difficult and uncommon in nations such as Mexico.

In fact, fewer than 20% of the population has access to credit, with only 10% owning credit cards. This frequently occurs when people earn less than what traditional banks need or engage in the informal sector owing to a lack of official employment opportunities. In the case of Vexi, for example, around 75% of cards are between the ages of 18 and 35, with an average monthly salary of USD 600 to USD 800.

Over 60% of its clients are self-employed or operate their own enterprises, with the bulk of them using the cards to buy business supplies. Despite the fact that credit cards have a lower penetration in Mexico than in the rest of Latin America, they are still the most often utilided form of payment for online transactions. Just 30 million credit cards are available for a population of over 123 million people, suggesting a 24% penetration.

The competitors Yet, Mexico is one of the Latin American countries that is leading the way in encouraging the development and acceptance of digital banking and financial services. This may also be reflected in the massive investments. Klar, for example, has secured USD 70 million  in equity capital at a USD 500 million value.

The firm is currently attempting to enhance its credit offering. It is also on the lookout for M&A prospects. In terms of geographic expansion, Klar has set his sights on Mexico.

It also intends to utilize its additional funds to develop new products, such as various borrowing options to supplement what Klar currently provides, as well as investment opportunities. Stori, for example, secured an extra USD 50 million  in equity at a USD 1. 2 billion value to become a Unicorn.

The current amount of funding will be used to extend its product offering and coverage region throughout Spanish-speaking Latin American countries, as well as to hire more people. .