Mendel, an enterprise expense management solution for Latin American businesses, today announced it has raised $ 35 million in debt and equity.
The Mexico-based startup closed the $ 15 million Series A funding round and $ 20 million debt financing after participating in Y Combinator’s winter 2021 cohort. ALLVP and Infinite companies, a company founded by a trio of former PayPal executives, co-led the fundraiser. A number of angel investors also attended, including Airbase Founder and CEO Thejo Kote, Auth0 Co-Founder and CTO Matias Woloski, Mercado Libre CFO Pedro Arnt, Kavak CEO. Federico ranero and Keri Gohman of Bain Capital, among others.
Better Tomorrow Ventures, Broadhaven and Magma Partners are also backers of the company.
Mendel’s mission is simple: to reinvent corporate expense management by automating most of the operations for a corporate CFO that are currently done manually. Or, more simply, it wants to be a one stop shop for all B2B expenses. Alan Karpovsky and Alejandro Zecler (who have both already founded and sold other startups) started the company late last year and Helena Polyblank (CPO) and Gonzalo Castiglione (CTO) then joined as co -founders.
“When you look at all the different areas of a business in Latin America, the CFO function is clearly the one that has had the least innovation, ”said Karpovsky. “Unlike marketing directors who have all kinds of media optimization platforms, content creation tools and social listening software, and technical directors who have countless executives, repositories, collaboration tools. CI and code improvement, CFOs still rely primarily on spreadsheets and ERPs – and even in some companies. Fax machines. “
The business spending space is more and more crowded. Ramp and Brex have both raised large amounts this year, and TripActions pivoted last year beyond travel to managing general expenses. Divvy was acquired by Bill.com. Mendel, however, compares his model to that of Airbase, a US-based startup that closed in June. a $ 60 million Series B led by Menlo Ventures and whose CEO is an investor.
“Our current solution is like ‘Ramp for Latin America for Business’,” Karpovsky told TechCrunch. “In the United States, all of these companies target the startup / SME sector. We are deeply focused on providing enterprise solutions for large companies where the CFO doesn’t wake up every morning thinking “How can I get more money back”? ”
Mendel says its software gives finance teams a way to manage card transactions in real time, Granular spending rules and track spending from a central dashboard. Its roadmap will go beyond expense management to include automation of accounts payable, employee cash advances and factoring.
Part of Mendel’s strategy is to attract customers with high payment volume and low credit risk, while charging SaaS fees for using their platform. The startup, which is currently focusing on the Mexican market, got off to a strong start – onboarding more than 150 clients (such as Mercado Libre, PetCo and Telcel) in the first months since its launch earlier this year. Mendel announces its payment volume (GTV) has been multiplied by 100 in the past three months. Currently, his payment volume is increasing twice week after week, according to Karpovsky.
The B2B payments market in Mexico is a huge opportunity, the company believes, especially given the low number of card payments. In fact, Karpovsky said traditional banks and American Express had not increased their market share in the country “for years.”
Currently, Mendel has 70 employees and plans to end 2022 with 200. It also plans to use its new capital to “invest heavily” in product development, including expansion into broader B2B payments, as well as marketing and outreach. sensitization. The money will also be used to develop new verticals and new partnerships.
Its investors are naturally optimistic about the potential of the company.
Federico Antoni of ALLVP said his firm has been interested in business spending and financial services for years, seeing it as a “huge opportunity” in Latin America.
When he ran into Mendel, he was impressed with the team’s vision of “building the next Nubank for business”.
“Mendel’s mission and vision resonated with us immediately,” he told TechCrunch.
Infinity’s Mario Ruiz agrees. “In Latin America, large companies are underserved by incumbents, and Mendel is democratizing access to the best software and payments,” he wrote by email. “As we’ve seen with the success of other corporate card and expense management startups around the world, we believe Mendel has the team, the technology and the tenacity to become the leader in Latin America. “
Sheel Mohnot of Better Tomorrow Ventures said her company was attracted to investing in Mendel because its “the product must really exist ”in Latin America where“ no one else is tackling ”the problem.
“We have seen a lot of success with this model in the United States and there is more need in Latin America – companies don’t just give everyone cards, spending control is important”, a- he declared. “These guys have already built a successful business in a similar company and had already signed Mercado Libre as a client before leading the round.”