Mexican neobank Kapital Grupo Financiero achieved “unicorn” status on Tuesday after raising US $100 million in a Series C funding round, doubling its valuation to US $1.3 billion. The milestone comes shortly after the bank acquired Intercam Bank, the target of recent U.S. sanctions for allegedly laundering money for cartels.
Kapital joins a handful of Mexican companies that have reached the coveted unicorn status, including used-car seller Kavak, crypto exchange Bitso and fintechs Stori and Plata.
“We are proud to join the small group of unicorns in Latin America,” said René Saul, CEO and co-founder of Kapital Grupo Financiero. “Kapital … reached profitability in less than two years, and our growth continues to accelerate thanks to the combination of a banking license and proprietary software.”
“Unicorn” status — achieved when the valuation of a privately held start-up exceeds $1 billion — indicates exceptional innovation and rapid growth potential, and is a coveted milestone for investors and founders.
California venture capital firm Tribe Capital and Pelion Ventures led the funding round, with support from Marbruck Ventures, True Arrow and Y Combinator.
Kapital Bank will use the funds raised in the Series C round to build an AI-driven financial ecosystem to improve business performance, according to LatAmList, a magazine focusing on startup and venture capital news in Latin America.
A Series C round is a late-stage funding round for a successful startup, typically focused on significantly expanding existing operations to access new markets and geographies.
Investors in Series C rounds — frequently a final step before an initial public offering (IPO) — often include established venture capital firms, private equity firms and other financial institutions seeking substantial returns by investing in a mature, less risky company.
Fintech Futures reported that Kapital previously raised US $40 million in Series B equity financing and a US $125 million debt facility in December 2023, preceded by a $23 million Series A round and $45 million debt facility in May 2023.
The Delaware-incorporated but Mexico City-based fintech company, founded in 2020 by CEO Saul, CFO Fernando Sandoval and managing director Eder Echeverria, has also carried out several high-profile purchases of more traditional banking operations.
CIBanco, Intercam sell off assets as US extends bank sanction deadline
In 2023, Kapital bought Mexican bank Autofin to sidestep the lengthy process of independently applying for a banking license.
The company made headlines last month upon announcing it would acquire Mexican financial group Intercam’s brokerage, asset management and operational banking assets.
Intercam was among the Mexican financial institutions hit by U.S. sanctions in June due to money-laundering accusations.
Reuters reported that Kapital is “working with U.S. and Mexican authorities to ensure compliance in the purchase.” The acquisition also involves a US $100 million investment in banking operations.
Kapital Bank, with operations in Mexico, Colombia and the U.S., offers banking services for individuals, including accounts, investments, and credit.
The fintech company also offers banking services for SMEs (Small and Medium-sized Enterprises), including business checking accounts, loans, and wealth management tools.
Customers can manage their finances, transfer money and pay bills through Kapital’s online and mobile platforms.
With reports from Reuters, LatAmList, La Jornada and Fintech Futures
