Remittances from staff within the U.S. to their households and mates in Latin America amounted to $155 billion in 2023. With such an enormous alternative, banks, cash switch firms, retailers, and fintechs are all attempting make transfers extra handy on each side of the transaction.
Quick-growing startup Félix Pago is one in all these gamers, and lately raised a $15.5 million Sequence A spherical of funding to develop its presence in Latin America and the U.S, TechCrunch discovered completely. Its fundamental interface is WhatsApp, with a chatbot that makes it easy to ship and obtain cross-border cash transfers, even with a voice message.
“I like to say that WhatsApp is the operating system of the region, so it makes sense that we build something on WhatsApp to make it super easy,” CEO Manuel Godoy advised TechCrunch.
WhatsApp itself already enabled peer-to-peer transactions and the choice for customers to pay companies by chat, however solely in Brazil and India. However a broader rollout wouldn’t be unhealthy information for Félix and comparable options like BidSend, Leap Monetary and Zapp — if customers can use their card on WhatsApp, remittances would solely be one click on away, Godoy says.
Meta at the moment appears to see these third-party developments favorably. Its WhatsApp for Business weblog highlights the use case of Nicaragua’s LAFISE Financial institution, which constructed a digital assistant in WhatsApp to make remittances smoother.
However Félix Pago has a broader purview. Apart from WhatsApp, which they have already got put in, “users don’t have to download any app,” Godoy stated. On the U.S. facet, customers full many of the transaction particulars through the WhatsApp chatbot; it’s solely on the final step that they should click on on a hyperlink to securely fill of their debit card informationAnd on the opposite finish, cash may be collected immediately in native foreign money as a financial institution deposit, but in addition in money at a retailer.
Money is usually what recipients favor, so Félix Pago tailored to that actuality and made partnerships to have money pickup areas in Mexico, Guatemala, and Honduras. For an additional $1.99, “the sender receives a receipt with a unique ID number and they send this receipt to the beneficiary to show it to the teller so they can pick up the cash.”
Much more is occurring behind the scenes, because of in-house and third social gathering instruments that Félix makes use of to adjust to its obligations and optimize its operations. There’s KYC, AML and fraud prevention; and there’s crypto, Godoy stated.
By utilizing Circle’s USDC stablecoin, Félix Pago is ready to make financial savings on international alternate that it may go to customers. USDC’s 24/7 availability additionally reduces Félix’s pre-funding wants, enabling it to make the primary transaction free, as rivals Remitly and Western Union do. Félix then expenses $2.50 on subsequent transactions to Guatemala and Mexico, whereas it opted for tiered pricing for Honduras. Total, this makes charges a lot decrease than on SWIFT transactions, that are additionally slower.
“Crypto is a powerful enabler for remittances, but you have to abstract that from the user. The user doesn’t care about that. I always say that it could be a donkey crossing the border, it doesn’t matter. What they want is the money, the local currency, and they want instantly at the best possible price. And crypto enables that on the backend.”
Since Félix depends on USDC and crypto companions, Godoy thinks the area experience of its new lead investor, Boston-based crypto fund Citadel Island Ventures, makes it a welcome addition to its cap desk. “We’re already leveraging some of their portfolio companies to make our infrastructure more robust, and one of their partners, Nic Carter, is one of the leading experts in USDC [and] stablecoins, so I think that gives us a lot of leverage.”
Change Ventures, the fund that led Félix’s pre-seed extension spherical in 2023, additionally participated once more, as did buyers that took half in its earlier $2.5 million pre-seed spherical, together with HTwenty, Contour and MELI Capital, the company enterprise capital arm of Latin American e-commerce big Mercado Libre, whose partnership with Félix gave the startup a major increase.
Beneath that partnership, Mercado promotes Félix Pago to customers of its cost platform Mercado Pago in Mexico. These referrals accounted for 25% of its new customers on the time.
An identical partnership with neobank Nubank adopted, giving Félix’s development one other bump. “The cool thing though, is that today we continue growing roughly 30% month over month, but it’s not just because of those partnerships,” Godoy stated.
Referrals are its fundamental development engine, however the firm additionally depends on influencer advertising and Fb to make itself higher identified amongst its target market within the U.S. To date, most of its customers there are blue-collar Latino professionals working in building, meals, and residential companies.
This makes Godoy assured that Félix will stay complementary to Nubank and Mercado Libre, even because the latter expands its fintech plans. (It’s reportedly searching for a banking license in Mexico.) “They don’t have a product in the U.S., so ultimately the sender is a Félix Pago customer.”
Félix Pago additionally hopes to assist these clients with greater than remittances. “The vision that we have for Félix is to become the trusted companion for the Latino immigrant in the U.S.” Its roadmap features a credit score builder and, ultimately, precise credit score.
First, although, the startup will use its new funding to increase into El Salvador and Nicaragua, adopted by the Dominican Republic and Colombia, after which the remainder of Latin America. That’s a necessity if Félix desires to maneuver additional on its roadmap and have an edge on different firms aiming for a similar spot.
“To become that trusted companion of the Latino in the U.S, we have to solve the [remittances] problem for all Latinos,” Godoy stated.
