JPMorgan Chase & Co. and International Finance Corp. are leading a $27 million round of investment in KLYM, a data-driven fintech that focuses on providing working capital to small and midsize companies in Latin America.

KLYM will use the capital to expand, with Brazil as the main priority in 2023, Diego Caicedo, co-founder and chief executive officer of Bogota-based KLYM, said in an interview. The firm, formerly known as OmniLatam, plans to also expand in Colombia and Chile, and is working with regulators to start a business in Mexico.

“This investment will take our partnership with JPMorgan to the next level,” Caicedo said. “Now that they are going to be equity holders in the company, it’s going to cement our relationship for the long-term.”

JPMorgan is seeking partnerships to offer digital banking services to retail customers as well as small and midsize companies outside the US. In addition to a minority stake at KLYM, the New York-based bank has previously invested in two Brazilian firms. In June 2021, it agreed to buy 40% of Sao Paulo-based digital bank C6 after acquiring equity in another Brazilian fintech, FitBank Pagamentos Eletronicos SA, a year earlier.

KLYM has had a strategic alliance with JPMorgan since the middle of last year that enables the fintech to obtain funding in dollars, euros and other currencies, and to do trade finance.

“Cross-border supply-chain finance is a capability very few fintechs have because it’s very expensive to build a bank in Europe or in the US to do this,” Caicedo said.

The company has received mandates from Brazilian companies in the agricultural, pharmaceutical and biofuel industries, with financing expected to reach $1 billion in 2023. KLYM can finance suppliers in 32 jurisdictions, including China, and supports 25 different currencies.

Data Collecting

The firm offers receivables finance and working capital in general, Caicedo said. It collects data such as invoices and tax forms to help make credit decisions based on the prospective borrower’s clients, sales and employees.

KLYM hired Alexandre Mandel, a former director at Mitsubishi UFJ Financial Group Inc. in Brazil, to lead the operation there. The firm plans to hire 80 workers in Brazil in 2023, ending the year with about 100 employees in the country. Including Colombia and Chile, it has more than 400 employees.

A regulatory change in Mexico requiring payments to be registered digitally can also help KLYM there, as the firm’s platform can be used for that.

“Players like KLYM are changing the trade-financing market architecture, challenging the role of traditional banks and introducing operational efficiencies that are making it easier for small and midsize companies to access financing,” Elizabeth Martinez de Marcano, IFC’s country manager for Colombia, said in a statement.

OmniLatam was founded by Caicedo and his partner, Andres Abumohor, in 2017, and was purchased by Greensill Capital in June 2020, just eight months before the London-based company filed for administration in the UK after a stunning collapse that shook the global financial community. In May 2021, the two Latin American managers bought the region’s operations back with the help of the Miami-based investment firm 777 Partners.

With this round, the company has secured $95 million in equity since it was founded. Caicedo has plans to raise more capital this year, and estimates the company will become profitable after revenue quadrupled last year, to $25 million. KLYM has a $170 million credit portfolio, and handled more than $700 million in loans in 2022.

–By Cristiane Lucchesi (Bloomberg)