(Bloomberg) -- Mexican fintech OCN, which offers car rental models for gig workers in Mexico and the US, has raised $86 million in equity and debt to fund its growth locally as well as its international expansion.
The Series A round for the company formerly known as OneCarNow was led by Brazil’s Caravela Capital, Collide Capital and Great North Ventures on the equity side of the round. New York-based i80 Group led the debt portion of the raise.
The proceeds of the round will be used to grow the company’s tech infrastructure and to open upper management positions, said co-founder and Chief Executive Officer Mairon Sandoval in an interview.
“OCN is essentially a financial platform that offers accessibility for gig workers to have access to working capital that, because of their social economic background, credit score and other limitations, they wouldn’t otherwise have access to,” Sandoval, 22, said.
New Dynamics
The round comes as venture capital dealmaking in Latin America has hit its slowest pace in six years, in part due to a pullback from US investors in the region amid high US interest rates.
“Venture capital dynamics have changed drastically since 2021,” Sandoval said. “Access to capital was a very different game. Companies that are now getting funded are more resilient and more strategically focused. It’s not about growth at all costs, but being mindful about this growth.”
OCN launched in 2022 and offers gig workers new car rentals based on a weekly fee that includes maintenance and insurance, among other services. Users can choose to purchase the car at the end of a 36-month contract.
The company operates in 22 Mexican states that include the capital and other larger metropolitan areas like Monterrey and Guadalajara. It also recently launched operations in South Florida. Overall, OCN has served more than 25,000 customers, Sandoval said.
Risk Assessment
The company uses a risk assessment analysis to provide services given most of their users will be likely turned down by traditional leasing companies or financial institutions, he said. The next step is to use that tool to offer other financing products beyond car rentals, Sandoval said. The portfolio’s performance rate is at 98%, he added.
The company has plans to expand in both the US and Mexico and also has prepared a “detailed analysis” for its entrance into Brazil, which it’s eyeing in 2025.
“OCN has been backed since the beginning by Brazilian investors,” he said. They’re interested in similar lines of business like motorcycle, phone and personal loans for the gig economy, he added.
Sandoval says OCN has been profitable “from the start” and he sees the company growing organically without any major investments in the future.
“We want to be super capital efficient so with the right assumptions, the company can reach a level of organic growth in the future and not have the necessity to keep raising equity money,” he said.
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