Santander InnoVentures invests in Latin American alternative SME lender a55

Santander InnoVentures, Santander Group’s venture capital fund, today announces its investment into a55, a Latin American income-secured alternative small and medium-sized enterprise (SME) lender. The venture fund has already invested in over 30 fintech companies after being established six years ago. This is its fourth investment in Latin America.

a55 was founded in early 2018 by André Wetter and Hugo Mathecowitsch in Brazil and provides solutions in the alternative lending space, offering revenue-backed credit lines to companies with recurring revenue. It aims to become the financing platform for service-based companies in Latin America, starting with software-as-a-service (SaaS) businesses and has recently launched operations in Mexico. 

The company underwrites SMEs through a technology platform connecting bank accounts, escrow solutions, billing, payment means and credit intelligence. a55 counts today 45 professionals, mostly in the areas of credit underwriting, software development and data science, in Brazil (São Paulo, Florianópolis) and Mexico City.  

Since the launch of operations two years ago, a55 has underwritten 50 companies in Brazil and Mexico through 350 different operations, with MXN 150 million (c.€6 and $7 million) in Mexico and BRL 100 million (c.€17 and $19 million) in Brazil. The company expects to double those numbers in the next 12 months.

Manuel Silva Martínez, managing partner at Santander InnoVentures, said: “The current crisis will accelerate shifting consumer habits to digital and subscription models. This will tremendously benefit software-as-a-service companies, which will need alternative financial services providers to support their growth and success. a55 is in a privileged position to support the Brazilian and Mexican companies with their financial offering, tailored to their needs and particularities, and built by entrepreneurs for entrepreneurs. We are excited to partner with Hugo and his team to put all our financial services expertise to their service.” 

Manuel will join a55’s board of directors and work together with the team to help expand their capabilities and product reach and explore possible area for partnering with Banco Santander around the region.

Hugo Mathecowitsch, CEO and co-founder at A55, said: “We began our journey in a kitchen trying to lend our own money with pen and paper to companies with no real assets to lend against. Two years after this first iteration, it is a great honor for us to partner with Santander InnoVentures to accelerate our growth in Latin America. InnoVentures is a reference in the fintech space with fantastic portfolio companies in Brazil, Mexico, Europe and the US we often benchmark ourselves against. Manuel sits at the board of such companies and will surely bring an enriching expertise to a55. That is a great milestone to be part of this inspiring Group and a proof that our team is working on a very promising product. Data is the new gold and fuels the new economy. We are building the platform of the future, where transactional and revenue data will drive credit decisions and shape the future of financial services.” 

a55’s technology solutions include, for borrowers, a credit monitoring dashboard, an insights section on revenue and cost metrics, an integrated cash flow covenant management system and escrow and revenue lock up tools to redirect a portion of the borrowers’ cash flows. For lenders, a55 developed a portfolio management and monitoring platform fed in real time by transactional data.

a55 is backed by institutional lenders in Brazil, Mexico, the US and France providing the platform with liquidity to lend to Brazilian and Mexican SMEs. The company had previously raised US$ 3 million in seed money from small Brazilian and international investors. Santander InnoVentures has been leading this round, which exceeds US$5 million in total from different investors.  

This investment builds on Santander InnoVentures’ lenders portfolio, which includes direct lenders like Kabbage in the US, Klar in Mexico, and companies supporting lending processes like MarketFinance in the UK, and Roostify (mortgages) and Autofi in the US. 

About Santander InnoVentures

Santander InnoVentures is Santander Group’s corporate venture capital fund. It invests in fintech startups and adjacent verticals to accelerate their growth, helping entrepreneurs and their teams, and supporting them with capital, scale and Santander’s expertise. Since launching in 2014, InnoVentures has invested in over 30 companies, making it one of the most active bank-backed fintech corporate ventures in the world.

About a55

a55 is a FinTech underwriting SMEs in Brazil and Mexico through a technology platform connecting bank accounts, escrow solutions, billing, payment means, credit intelligence and revenue insights. a55 counts today 45 professionals, mostly in the areas of credit underwriting, software development and data science. a55 lent more than BRL 100m and MXN 150 million in 350 operations to 50 borrowers since it started to operate, with late payments below 4%.