Silicon Valley FinTech startup Tribal Credit closed a $34.3 million Series A funding round led by QED Investors and Partners for Growth (PFG), with participation by existing investors BECO Capital, Global Ventures, OTG Ventures and Endure Capital and new investor Endeavor Catalyst.
“This round allows us to accelerate our growth in Mexico and help the new generation of SMEs [small to midsized enterprises] fueling the Mexican economy break free from local financial barriers,” Tribal Credit CEO Amr Shady said in a blog post on Wednesday (April 21).
Shady added that that the startup was the first Latin American “mover in our segment” and has a “diverse suite” of product offerings for SMEs, including corporate cards, wire payments and treasury services.
The investment also included a $3 million infusion of capital from the nonprofit Stellar Development Foundation, which champions the buildout and growth of its open-source Stellar blockchain network. The funds will be used to integrate Tribal’s blockchain products onto the Stellar network.
The coronavirus pandemic sparked a digital migration for startups and new businesses and a growing need for cross-border business-to-business (B2B) payments. Many companies, however, found it difficult to get approved for the traditional corporate credit cards that would facilitate such transfers.
The ongoing COVID-19 pandemic has accelerated many startups’ move to digital and increased the number of new businesses spending online. Despite a need to make an ever-increasing number of cross-border B2B payments digitally, many SMEs have found it even more difficult to get approved for traditional corporate cards.
“QED has been following payments and the lending needs of SMEs in emerging markets closely, and Tribal has proven itself a leader in Latin America,” said Lauren Morton, partner, QED Investors. “Compared with everything else we’ve seen in this market, Tribal has a differentiated and superior product that meets customers’ needs in a way that no competitor can match.”
Latin America is a $15 billion opportunity, which is led by Mexico, Tribal Credit’s biggest market. The startup said there are 62 million Latin American SMEs that conduct business internationally.
In a PYMNTS interview in September 2020, Oyster CEO and Founder Vilash Poovala said digital platforms powered by open banking can be an alternative solution for business banking in Mexico. Digital processes fueled by the COVID-19 pandemic have prompted more than 50 percent of respondents in an August 2020 Mastercard study to go digital for B2B services.