International Finance Corporation and JPMorgan & Co are heading a $27 million round of funding for a Colombian Fintech. KLYM is a data-driven Fintech start-up that provides working capital to small and mid-size firms in Latin America.
Diego Caicedo, CEO and co-founder of KLYM said in an interview that the company would use the capital to expand operations in Brazil in 2023. The Bogota-based company, which was earlier known as OmniLatam, plans to expand in Chile and Colombia. They are also discussing with regulators about starting a business in Mexico.
Caicedo said the investment from JPMorgan will take their partnership to the next level as, being equity holders, JPMorgan will cement the tie-up for the long term.
JPMorgan Chase & co is looking to partner with KLYM in offering digital banking services to SMEs and retail customers beyond the US. The New York-based JPMorgan, apart from having a minority stake in KLYM, has also invested in two other Brazilian companies. It bought a 40% stake in C6 Bank in Sao Paulo and an equity stake in FitBank Pagamentos Eletronicos SA, a Brazilian Fintech firm, in 2021 and 2020, respectively.
KLYM has had a strategic partnership with JPMorgan since mid-2022. It helps them get funding in euros, dollars, and other currencies and trade finance. Caicedo said that cross-border supply chain financing helps Fintech, which is very few of them.
KYLM has received mandates from companies in the agriculture, biofuel, and pharmaceutical sector based in Brazil, and it is expected to finance them to about $1 billion in 2023. KYLM can finance suppliers in 32 countries, including China, and about 25 currencies.
Data Collection for Credit Worthiness
KYLM provides working capital and receivables finance. It collects data for credit decisions such as tax forms and invoices and finances them depending upon the profile of the borrowers, sales, employees, and clients.
A former director of Mitsubishi UFJ Financial Group Inc. based in Brazil, Alexandre Mandel, was hired by KYLM to head the operations in that location. KYLM plans to recruit 80 employees in Brazil in 2023 and close the year with about 100 workers. It has more than 400 employees that, include Chile and Colombia.
KYLM stands to gain with its presence in Mexico as a change in regulatory laws requires payments to be registered digitally in Mexico, and KLYM has a digital platform that can be used there.
OmniLatam, the erstwhile KLYM, was founded by Caicedo and Andres Abumohor in 2017. Later in June 2020, it was acquired by Greensill Capital which filed for administration in the UK after a collapse that shook the global financial market only eight months later. The two co-founders repurchased the Latin American operations of the company with support from 777 Partners, an investment firm in Miami.
Growth in Credit Portfolio
After the current round of funding, KLYM has received $95 million in equity since its inception. Caicedo plans to tap more funds later this and estimates the Fintech will become profitable after the revenue increased four times to $25 million last year. KLYM handled more than $700 million in loans last year, and the current loan book size stands at $170 million.
