ANGIE DIDOMENICA


Pomelo, the Latin American company that develops technological infrastructure for companies to launch credit, debit, or prepaid cards in just a few weeks, has announced a $40 million Series B fundraising round led by Kaszek with participation from Endeavor Catalyst.

In an industry marked by its rapid growth, fintech companies in Latin America have been bogged down by the legacy financial infrastructure in the region. Digital banks, virtual wallets, and crypto players have emerged in recent years, ready to tap into the region’s potential, but they’re often held back by obsolete and expensive infrastructure that was created 30 years ago. It can take more than a year for a business to even launch one simple prepaid card in a single market, and navigating the maze of legacy institutions means pricing is inflexible and expensive.

Pomelo co-founders and Endeavor Entrepreneurs, Gaston Irigoyen, Hernan Corral, and Juan Fantoni lived these frustrations firsthand in their careers. Rather than offering painkillers for the problem, they set out to fix the backbone of this industry.

A Global Upbringing

Pomelo’s CEO, Gaston, was raised in different countries. He was born and lived in Switzerland for the first six months of his life. His family then moved to Peru for the next four years, living in a tough socio-political environment. By the time he was in school, they had moved to Buenos Aires, Argentina where he spent the later half of his childhood and adolescence, eventually attending the University of San Andrés.

He still remembers periods of hyperinflation in Argentina and the effects it would have—much like what’s happening in the country today.

“In many ways, we are trying to solve some of those structural issues that I saw firsthand growing up in the region,” says Gaston. “That has been motivational for me.”

With an eye for the tech industry, Gaston managed to start his career as one of the first Latin American employees at Google back in 2006. As an early employee, his experience at the growing tech giant was very entrepreneurial and widened his global perspective. He helped build an operation for all of LatAm from scratch and then worked to help the company monetize YouTube for the first time in Ireland. Google’s culture taught him that innovation moves the world forward.

From Employee to Entrepreneur

Armed with his many experiences at Google, Gaston began his own entrepreneurial journey in 2012. He created two companies over the next six years, one of which he sold to TripAdvisor. Then, in 2019 he became the first CEO of Naranja X, helping to create and launch what is now Argentina’s largest neobank.

As CEO of Naranja X, Gaston hired Hernan Corral as his Chief Product Officer to help with the launch. Hernan joined with 12 years of experience at Endeavor company Mercado Libre, where he helped create the company’s online payment platform for LatAm, Mercado Pago, from scratch, and guided its development as it grew to become a leading platform in the region.

Together, they worked to launch Naranja X, and it wasn’t easy. There were a lot of time-consuming infrastructure hurdles to building and launching a digital financial service in the region. Hernan had faced them before when he built Mercado Pago, but their frustration mounted.

After 18 months, $50 million, and 300 people, they finally launched the first version of Naranja X’s digital product.

A New Chapter for Fintechs in Latin America

Gaston and Hernan didn’t stay around to relish the launch of Naranja X. Their struggles had led them to believe the financial industry needed a better way to help fintech cut through red tape and shorten what was an expensive, grueling process. They decided to create what would become Pomelo, an infrastructure startup that would enable any company to launch a fintech and quickly expand across the region.

To disrupt the incumbent financial service giants, they enlisted Juan Fantoni to lead sales. Juan spent years as the Director of Fintech at Mastercard where he signed issuing deals with Mercado Pago, Ualá, and Despegar.

The three began to meet every week to reflect on the business, validate the idea, and humbly understand if they were the right people to solve this problem.

In 2020, Gaston left his role as CEO of Naranja X to fully commit to the vision of Pomelo. Hernan and Juan followed shortly after.

In April 2021, Gaston, Juan, and Hernan set their first goal for the company: to use their cards to buy gifts for the Christmas season. They had less than nine months to build a product from scratch, attract their first clients, and send their first invoices. By December, they were able to process their first payments, achieving their goal.

“We went from having absolutely no lines of code to having a product that would allow us to make purchases in any online or offline store throughout the region,” recalls Gaston. “We always remember that as our first big milestone.”

Pomelo’s platform now allows any company to become a fintech. It helps them onboard new users, delivers cards to customers, powers their virtual account, and offers other services like QR payments and real-time transfers.

Turning Complexity Into Simplicity

Gaston and the Pomelo team, highly motivated by their frustrating experiences with obsolete infrastructure, launched and scaled into six new markets very quickly.

Selected in 2022 by Endeavor, the three co-founders counted on the support of our global network of mentors, investors, and advisors to face significant challenges in scaling a complex business from Latin America.

Pomelo now works with amazing tech companies like Rappi, Stori, Bitso, and Nomad, as well as traditional banks and multinational companies.

The team’s focus is now shifting from global to local. They want to understand the nuances of the different financial ecosystems of each market they operate in. This Series B fundraising round will allow the team to create something powerful and long-lasting for the communities in LatAm.

Endeavor Catalyst’s (our rules-based, co-investment fund) participation was promised 18 months ago before the round even started. Gaston, Hernan, and Juan wanted to give back to Endeavor, and even in an oversubscribed round, our place was guaranteed.

By including Endeavor Catalyst in their funding round, they are paying it forward to our community. Future liquidity will support our goal to become a self-sustaining nonprofit organization.

The first generation of fintech companies in Latin America was marked by digital platforms like Nubank, Mercado Pago, Clara, and Clip. As LatAm becomes more complex and more inclusive of new technologies, Pomelo will pursue its ambitious goal of becoming a thriving infrastructure-as-a-service company, powering the financial ecosystem in LatAm.

 

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