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‘Send now, pay later’ company Pomelo gets $35M Series A from secretive Vy Capital, Founders Fund.
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‘Send now, pay later’ company Pomelo gets $35M Series A from secretive Vy Capital, Founders Fund.

According to an exclusive report by Eltrys, Dubai venture firm Vy Capital led a $35 million Series A round for Pomelo, a startup that combines international money transfers with credit. In addition, the company is announcing a $75 million expansion of its warehouse facility.

Founders Fund and A* Capital were also involved in the financing, along with early investor Afore Capital and other contributors.

The deal increases the total funds raised so far to $55 million in equity capital and $125 million for its warehouse facility. In 2022, Pomelo’s $20 million seed funding, led by the Founders Fund,.

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An undisclosed investment firm, Vy Capital, has quietly amassed a significant portfolio of over $5 billion in assets. Notably, they gained attention for supporting Elon Musk in his acquisition of Twitter. It is worth mentioning that the raise was one of the final deals made by Keith Rabois before he left the Founders Fund. Additionally, it is one of the few companies where he continues to serve as a board director, even after joining Khosla Ventures.

“Keith Rabois and Kevin Hartz demonstrated a strong pro-rata approach in this round,” explained Eric Velasquez Frenkiel, founder and CEO of Pomelo, in an interview with Eltrys. He characterized the Series A round as “preemptive.” He chose not to disclose the valuation, only mentioning that it was an “up round.”

Hartz is the co-founder and general partner at A*. In addition, he co-founded Eventbrite and Xoom, an online money transfer service that went public in 2013 and that PayPal later acquired for $1.1 billion in 2015.

Rabois highlighted in a written statement that Pomelo distinguishes itself with a unique approach to remittance transfer, building upon credit as its core foundation.

A product that enables remittance via credit card infrastructure


With the introduction of pomelo in the Philippines in 2022, individuals in the United States can now conveniently send money to the country while simultaneously establishing their credit. In simple terms, Pomelo has developed a remittance product that operates on credit card rails.

The startup has partnered with Mastercard to create a new product category known as “Send Now, Pay Later” (SNPL). According to the startup, this offering is faster and eliminates transfer fees when compared to conventional cross-border money transfers.

Image Credits: Pomelo

Pomelo operates by allowing users to create a credit card-based account. The account creator has the ability to establish limits, temporarily halt card usage, and monitor spending patterns.

Senders have the option to provide family members with cash in the form of credit. This allows for instant access to funds and protection against fraud and chargebacks. Potential immigrants who use this service to send money back home can also help improve their credit score by building a transaction history. According to Frenkiel, Pomelo charges a late fee if a customer fails to make a payment, preventing interest from accruing on the product. The company generates the majority of its revenue from interchange fees, while foreign exchange plays a smaller role in its earnings.

Since its 2022 launch, Pomelo has expanded its payment options by allowing users to send funds to GCash, a popular e-wallet in the Philippines, along with cards. A recent article by STL Partners reveals that a significant majority of Filipinos, specifically 67%, utilize GCash.

Having a strong grasp of economic principles is especially crucial in a country such as the Philippines, where the ability to provide evidence of financial capacity may be necessary prior to receiving medical care, according to Frenkiel. He tells the tale of customer Danette Flores, a nurse who regularly sends money to two family members in the Philippines using pomelo. 

My mother experienced a heart attack and required immediate transfer to the ICU. However, the hospital insisted on receiving proof of payment before proceeding. According to Flores, her brother used his Pomelo Card to secure her admission.

Pomelo provides customers with two choices: an unsecured credit line or a secured credit line, depending on its current underwriting criteria. Unsecured customers can take advantage of the non-revolving credit line, allowing them to transfer up to $1,000 per month. From a financial perspective, a customer has the option to make a security deposit. Pomelo essentially allows users to store funds within the app, which they can then use to establish a credit line.

The startup plans to allocate its new capital towards expanding its product offerings and entering new markets. Mexico is the next country that Pomelo has set its sights on.

Frenkiel stated that Mexico serves as the primary channel for the United States, receiving an impressive amount of around $40 billion annually.

Currently, Pomelo employs 55 individuals in both the United States and the Philippines.

According to Christine Hall’s recent report, cross-border fintech is currently in high demand. The Bank of England projects that the cross-border payments market will surpass $250 trillion by 2027. Experts suggest that fintechs are posing a significant challenge to banks, particularly in the business-to-business sector. This is due to the adoption of emerging technologies such as artificial intelligence, machine learning, and blockchain, which fintechs are particularly fond of.

However, there are additional startups that have their sights set on the consumer market. One such example is Alza, a startup that aims to assist Latin or Central Americans who have relocated to the U.S. with their diverse banking requirements. Alza offers users a checking account and debit card that are FDIC-insured. Additionally, users have the option to conveniently send cross-border remittances to over 20 countries in Latin America or Central America through their app. Depending on the recipient country, the transfer method can be a bank transfer, cash pickup, or transfer to a debit card. In late 2021, the company successfully secured $6.6 million in funding, with Thrive Capital, based in New York, leading the round.

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