The latest in technology, Marketing and Startups.

Prometeo obtains $13M from PayPal, Samsung, and others for Latin American open banking.

Open banking, where traditional banks can share data and build new services using APIs to modernize their aging systems, has gained the most traction in mature economies, where most consumers and businesses already have bank accounts, are familiar with digital transactions, and are open to new solutions to everyday problems that save time and money.

Even the most sophisticated nations are sluggish to embrace open banking—only 11% of consumers and 18% of small firms in the U.K. have utilized it—so some believe the true potential is in emerging economies.

Today, Uruguay-based company Prometeo announced that it has raised $13 million to develop its open banking channels throughout Latin America. The business claims the investment is at a “standard” dilution for Series A, so it’s likely worth around $100 million.

Established in 2018, Prometeo has thrived on little capital. Ximena Aleman, co-CEO and co-founder, was a journalist covering media and IT before switching to fintech. Before this round, it received $6 million.

Prometeo may be following its CEO’s unconventional path to development.

Many open banking initiatives now concentrate on nationwide rollouts since banking norms and rules are specialized. Prometeo is approaching Latin America and its fragmentation as a single market utilizing a single API.

So far, the API has enabled 350 channels at 283 financial institutions across 10 countries. Brazil and Mexico are the region’s largest fintech markets and its two largest. Aleman, who heads the company alongside co-founder Rodrigo Tumaián, said its most popular services include account-to-account payments, account validation, and cash management for organizations.

She said that with sales expanding 10x in the previous two years (the firm does not disclose revenue data), the objective is to increase customers, services, and regions.

The fact that Latin America is behind Western Europe and the U.S. in financial services presents substantial obstacles for open banking enterprises in the area.

Bank account penetration is estimated at 70%, which is growing but remains below the 90+% of nations in other areas where open banking has taken root.

“There are a lot of improvements still to be made for financial inclusion,” Aleman said, adding that most companies and consumers use cash for everyday transactions.

Looking at things differently, this may be an opportunity. In mature markets, the prevalence of payment rails administered by large credit networks like Visa is a key competitive barrier. Latin America faces less of that difficulty. The open banking startup Ivy raised funding last year to expand to Latin America, and Christine wrote extensively on Finerio, a Mexican open banking startup.

The corporations sponsoring Prometeo in this round show who wants to thrive in the area and thinks open banking will assist. Asia Pacific-based Antler Elevate is heading the investment, alongside PayPal Ventures, Samsung Next, DN Capital, Cometa, and Magma Partners.

PayPal and Samsung Next are not yet collaborating with Prometeo on services, but supporting the firm shows their interest. PayPal has invested in local companies for years. In 2019, it invested $750 million in MercadoLibre, perhaps its largest. Last year, it led to a $14 million investment in Latin America cross-border trade expert Nocnoc. It owns Zettle, a point-of-sale payments startup that has been expanding throughout Latin America for years.

Samsung dominates the region’s mobile phone market with over 40%.

Both situations show a desire for vital collaboration and early entry into a promising market. As of 2020, 10% of regional transactions were made using digital wallets, including mobile wallets, which both businesses expect to become more important.

However, the startup’s success and interest from regional financial giants like Citi, Santander, J.P. Morgan, Vtex, and many local companies have caught investors’ attention.

“Prometeo, with its simple single API, provides banks and financial institutions access to payments and data throughout Latin America,” said Antler Elevate partner Fady Abdel-Nour. “We are excited to partner with Ximena and Rodrigo to build a company that advances technology and empowers businesses to succeed.”

Eltrys Team
Author: Eltrys Team

Share this article
Shareable URL
Prev Post

Meta meeting details say Threads will let you follow Mastodon users before year-end.

Next Post

Instagram eliminates 60 executive positions.

Leave a Reply

Your email address will not be published. Required fields are marked *

Read next
Subscribe to our newsletter
Get notified about our latest news and insights