Bogota-based Mezubo, a fintech specializing in digitally used car financing, announced it has raised a Seed round of $5.5 million led by Brazil’s venture capital firm Canary and Mexico’s DILA Capital.
The startup said it will use the proceeds to grow its business in Colombia, double its team of 35 people by expanding to another market in Latin America this year.
Mezubo pledges to help Latin Americans digitally apply for a loan for buying a used car and get an immediate reply with no need to go to a branch or interact with people.
Nicolas Pardo is the fintech’s CEO. He co-founded Mezubo in 2020 with his brother, Juan Sebastián Pardo. Before, Juan was an entrepreneur most of his life. After he went to Stanford in 2005, he started a financial institution in Colombia, Credifamilia.
Nicolas worked 12 years with tech companies. He founded an insurtech in 2010 and led it through eight years, and joined Uber as Colombia’s general manager in 2018. “At Uber, one of the challenges we had is that we needed to put more cars on the road. We need more drivers to ride. At that moment, we needed people to achieve and be able to buy cars,” he says.
In October 2020, the Pardo brothers founded Mezubo with a small round of $700,000 from angel investors in Colombia to put together an MVP (minimum viable product), and check if there was a demand.
“We started this company because we see there is a huge car market but it’s being neglected. Only in Colombia in 2021, there were 1 million used car sales, and more than 80% of those transactions are done between individuals. Transactions can happen anywhere. In this huge and fragmented market, you need digital capabilities. We saw this in Colombia but it’s what you will find in many countries in Latin America,” adds the CEO.
The company doesn’t disclose how many clients it has but says that in a few months of operation in Colombia it had more than 20,000 applications. “We see potential to grow, we have not only demand but also very good feedback”, states Pardo.
Mezubo finances individuals’ car sales in partnership with financial institutions. It originates the loan and sells it to a financial institution. Mexico’s unicorn Kavak and Brazil’s Creditas also have a used car financing feature amid its buying and selling second-hand cars marketplace.
“We value a lot the fact of being specialized, I’m not saying in the future we will not diversify, but so far the focus is only in financing used cars”, adds the exec. Mezubo expects to grow five times this year over 2021.
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