US-based Pomelo , a fintech startup that combines international money transfer with credit, has raised USD 35 million in Series A funding round. Pomelo’s Series A, led by Vy Capital, brings total funds raised to date to USD 55 million in equity capital and USD 125 million for its warehouse facility.

The startup’s new capital will go toward product and market expansion. Pomelo’s next target country is Mexico. Company officials stated that Mexico is certainly one of the largest corridors for the US — something close to USD 40 billion is sent over to Mexico every year.

Remittances based on credit Pomelo launched in the Philippines in 2022, allowing people in the US to send money to the country while at the same time building their credit score. In other words, Pomelo has built a remittance product on credit card rails. The startup has struck up an agreement with Mastercard to create a product category called ‘Send Now, Pay Later’ (SNPL), which it claims is ‘faster and with no transfer fees’ as compared to traditional cross-border money movement.

Pomelo works by allowing a user to set up an account that comes with credit cards. The creator of the account can set limits, pause cards, and view spending habits. Senders can give cash, in the form of credit, to family members — which the startup thinks will help with instant access to funds, fraud and chargeback protection and, for potential immigrants that may use this to send money back home, a way to boost one’s credit score with more transaction history.

In the event that someone cannot pay, Pomelo charges a late fee, so there is no interest on the product. GCash integration and flexible credit lines Since its 2022 launch, Pomelo has added new payment options, including the ability for users to send funds to GCash, a popular e-wallet (similar to Venmo in the US) in the Philippines, in addition to cards. Pomelo offers customers two options: either an unsecured credit line or a secured credit line based on its underwriting criteria at this time.

The non-revolving credit line for unsecured customers gives them the ability to transfer up to USD 1,000 a month. On the secured side, a customer can put in a security deposit. In other words, Pomelo can hold funds in the app that effectively can be used to open a credit line.

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