SoftBank, GIC Back Colombia Fintech’s $200 Million Funding Round

(Bloomberg) -- Addi, a startup that has seen rapid growth by offering customers in Latin America the option to buy now and pay later, raised $200 million of debt and equity to help fuel an expansion in the region. 

The Bogota-based financial technology company said its valuation is above $700 million after it raised $80 million in equity from Singapore’s sovereign wealth fund, GIC Private Ltd., Softbank Group Corp.’s Latin America Fund and others. The round included an additional $125 million in debt financing, most of which came from Goldman Sachs Group. 

Addi had just closed a fundraising round in August but decided to add more capital to keep up with growth, said Santiago Suarez, the chief executive officer who co-founded the company in 2018. Addi is benefiting from a flood of venture capital in Latin America. Annual spending on the region’s startups topped the $10 billion threshold for the first time -- according to the Association for Private Capital Investment in Latin America -- as major funds such as Softbank, Tiger Global Management and Sequoia Capital Operations hunt for investments.

“Business is accelerating a lot faster than expected,” Suarez said. “So we decided to fill up the gas tank to continue driving into 2022 without having to worry about fundraising in the near future.” 

Addi has been adding customers and retailers amid a boom in online sales and e-commerce which increased during the pandemic as more people shopped from home. The company, which recently expanded to Brazil, will open an office in Mexico next year and is actively considering other markets, according to Suarez. 

More than 500,000 customers and 1,000 retailers are using its payment-processing system, compared to around 30,000 clients and 20 merchants a year ago, he said. It is aiming for five-fold growth next year.  

The company’s buy-now-pay-later technology allows customers to pay for purchases in installments. It has also rolled out a one-click shopping feature. Addi works with large retailers such as Apple and Nike, but also small mom-and-pop stores. 

It’s a natural fit in a region where most of the population doesn’t qualify for credit cards or other banking products, Suarez said. 

“As a consumer, you might get turned down, you might not qualify, there are all these things that can happen that make it very difficult,” he said. “We’re well on our way to building a new way to pay in the region.”

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