FinTech offering LatAm businesses access to growth capital Divibank closed a $3.6m round of seed funding led by San Francisco-based Better Tomorrow Ventures and Village Global which includes Bill Gates, Jeff Bezos and Mark Zuckerberg as investors.
A host of other investors participated in the round including existing backer MAYA Capital and new investors such as Clocktower Ventures, Magma Partners, Gilgamesh Ventures, Rally Cap Ventures and Alumni Ventures Group. Other high-profile angel investors also put money in the round including Rappi founder and president Sebastian Mejia, founder of Paga Tayo Oviosu who participated via Kairos Angels, Ramp founder and CTO Karim Atiyeh and Bread founders Josh Abramowitz and Daniel Simon.
The fresh capital injection will enable the company to increase its team from eight to 30 employees by the end of the year, launch its own digital campaign management platform to help client companies and create new financial products.
Founded by Jaime Taboada and Rebecca Fischer, Divibank specialises in financing digital marketing campaigns for startups and small businesses. Inspired by the unicorns like Pipe and Clearbanc, Divibank built a credit model in which customers pay a monthly percentage of their revenue – which can vary from 1% to 12% – until they pay the debt.
The firm has seen massive growth despite the pandemic. In the past six months alone, the company signed on over 50 new clients, with its total loan issuance volume increasing by 7x. To add on, the firm’s revenues climbed by 5x, customer base increased by 11x and employee base by 4x. The firm boasts of a client base including Dr. Jones, CapaCard and Foodz, among others and aims to boost its reach to more e-commerce, EdTechs, FinTechs and SaaS companies.
Detailing about the firm’s plans, Taboada told TechCrunch, “We founded Divibank the same week as the lockdown started in Brazil, and we saw many industries that didn’t traditionally advertise online migrate to Google and Facebook Ads rapidly. This obviously helped our thesis a lot, as many of our clients had actually recently went from only selling offline to selling mostly online. And there’s no better way to attract new clients online than with digital ads.”
Looking ahead, Divibank is working on a few additional financial products for its clients, targeting the more than $205bn e-commerce and SaaS markets in Latin America with offerings such as inventory financing and recurring revenue securitisations. Specifically, it plans to continue developing its banking tech platform by automating the whole credit process, developing its analytics platform and building its data science capabilities to improve its credit model.
Commenting on the firm’s growth, Better Tomorrow Ventures founding partner Jake Gibson said, “Better Tomorrow Ventures realized that Divibank was a truly innovative company, in addition to being in the right place at the right time, ready to take advantage of the growth of e-commerce and digital advertising.
“The pandemic has only accelerated things. Many companies are starting online, many are moving from offline to online, and startups have recognized that venture capital is not the only alternative they have to expand their business.”
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