Consumer fintech Stori announced today that it has raised $32.5 million Series B funding led by Silicon Valley-based Lightspeed Venture Partners with participation from existing investors Vision Plus Capital, BAI Capital and Source Code Capital. The new financing will support the company’s rapid growth as it is quickly becoming a top credit card issuer in the country. This round brings the company’s total funding to $50 million to date and brings together an investor set with deep global consumer fintech experience.
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In the middle of the pandemic, Stori has been working tirelessly to meet Mexico’s huge, growing demand for flexible consumer credit and reliable digital financial services. Stori has focused on providing access to credit cards first because of the strong value the product offers consumers, including the ability to make online and in-store purchases, manage short term or emergency cash needs, and build a credit history.
Currently, less than 15% of Mexico’s adult population have access to a credit card. Meanwhile a country like Brazil with similar GDP per capita sees three times higher penetration. In Mexico, credit cards are concentrated with high-income customers, leaving out the massive middle- and emerging middle-class populations. One big challenge is that most of those consumers do not have a solid credit history yet. Providing access for thin- and no-file applicants requires innovative, tech-enabled underwriting that is constantly updating and improving. Another challenge during COVID-19 is that many consumers are hesitant to visit a bank branch to apply for a credit card in person. In January 2020, Stori launched its credit card product complete with a fully-digital in-app experience. The reaction from the market has been incredible with the company already reaching one million credit card applicants.
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Stori is growing its customer base fast and is well on the way to transforming the credit card landscape in Mexico. “By tailoring global best practices in underwriting, technology and user-friendly design, combined with rapid iterations, we’ve found the right formula to deliver a compelling product and experience to the large underserved population in Mexico,” says CEO and Co-Founder Bin Chen, who previously worked at Capital One and Mastercard in both U.S. and emerging markets. “Our goal is to become a leading digital bank for the underserved population in the region. The new investment will support our fast growth and will enable us to further strengthen our leading capabilities. In addition, we are benefitting from our investors’ extensive experience building category-defining fintechs like Affirm, Ant Financial and Webank.”
Stori’s co-founder, Marlene Garayzar, said, “It has been amazing to watch our team deliver such huge progress even during the pandemic. Our people and our capabilities are truly differentiated from what I have seen in 15+ years of financial service experience in Mexico.”
Stori will continue to leverage its customer-centric, tech-driven approach to provide access to digital financial services for millions of new customers. The company has built a scalable data infrastructure with feedback loops and iterations that are constantly accelerating to set the company ahead.
“Mexico is the fastest growing e-commerce market in the world. It has one of the top 15 economies in the world. Yet, less than 15% of Mexicans have access to credit cards,” said Mercedes Bent, Partner at Lightspeed. “We’re thrilled to lead Stori’s Series B financing and partner with the team as they continue to expand access to credit cards and build flexible digital financial products for people in Mexico.”
“We have a structural thesis on digital fintech models and are investing in these models globally, particularly in emerging markets. Vision Plus led Stori’s series A round and continues to super pro rata in this round. We are impressed by the team’s execution and excited by the local market opportunity as evidenced by the rapid growth,” said Yiran Liu, Partner at Vision Plus Capital.
“We are very excited to continue supporting Stori. Stori’s strong team has led it to become one of the fastest growing digital banks in Latin America. We look forward to their continued success and growing adoption by users,” said William Zhao, Managing Director at BAI Capital.
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