Pomelo, a startup building a fintech-as-a-service platform for Latin America, has raised $9 million in a seed round of funding. The Buenos Aires-based startup’s new infrastructure allows fintechs and embedded finance players to launch virtual accounts and issue prepaid and credit cards via “compliant” onboarding processes.
The COVID-19 pandemic has accelerated the adoption of digital payments worldwide, and Latin America is no exception. While most transactions are still done in cash, there are still over a billion cards in the region.
Cards have an estimated payments volume of $900 billion per year, yet 95% of these transactions are being processed by local incumbents, asserts Pomelo. This is a problem the company’s founders experienced firsthand in previous roles and are eager to solve by creating a new payments infrastructure.
“We know from previous experiences…that building a fintech, and particularly issuing cards, in Latin America is a real nightmare,” said Pomelo co-founder and CEO Gaston Irigoyen. “It takes anywhere from 12 to 18 months to launch a simple prepaid card, and unfortunately, companies have to go through the painful experience of repeating the process in every market where they operate.”
Pomelo aims to solve the problem by creating a new generation of financial services infrastructure that allows companies to build a fintech business and launch cards “much faster” throughout Latin America. For now, the three-month-old company is in its infancy — the pre-product phase, which makes it even more notable that the company managed to raise such a large seed round.