Goldman Lends $140 Million to Latin American Fintech Xepelin

Cristiane Lucchesi, Bloomberg News

(Bloomberg) -- Goldman Sachs Group Inc. provided a $140 million credit line to help finance a Mexico expansion for Latin American fintech Xepelin Holdings Inc., which offers services including payments and credit to small and midsize companies that do business with other firms.

“It’s our largest credit facility so far, denominated in Mexican pesos, and it’s just the beginning of what we hope will be a long-term relationship,” Nicolas de Camino, co-founder and co-chief executive officer of Santiago-based Xepelin, said in a video interview. “We hope we can increase it in the future, and a few times.”

The asset-backed loan has a maturity of about three years and will be released in two tranches, the first for $40 million and the second for $100 million. The company, which also operates in Chile and may expand to other nations, has a goal of reaching 1 million clients by 2025 from 15,000 now, said Camino, who is the former head of alternative assets at Banco BTG Pactual SA in Chile.

Goldman has been extending loans to several startups in the region, including last month’s $150 million credit line to Mexico’s Clara, which lends to corporations and helps manage their spending. In July, the Wall Street giant lent $233 million to MercadoLibre. It was involved in Nubank’s $650 million credit line earlier this year, and provided $160 million to support Mexico’s Konfio in 2021.

Xepelin specializes in business-to-business transactions, including supply-chain financing. Its system helps users organize accounts and automate payments to suppliers. According to Xepelin estimates, the market for payment services between companies in Latin America is as large as $8 trillion.

PayPal Ventures and Carlos Garcia, the founder of used-car startup Kavak, are among Xepelin’s backers.

Managing Accounts

“Before founding Xepelin, I worked with other small and midsize companies in Chile and Mexico as a banker, doing M&A, or even building a startup, and I realized how working capital and financial services are important for them to succeed,” said Sebastian Kreis, co-founder and co-CEO of Xepelin.

“Small companies usually don’t have a chief financial officer,” said Kreis, who was formerly an investment banker at Creditcorp Capital in Chile. “The owner is the CEO and CFO, and since he has to focus on operations, it has to be easy to manage accounts.”

Since founding Xepelin in 2019, Camino and Kreis raised $230 million in mid-2021, including debt and equity, and an additional $111 million in an equity round led by Avenir and Kaszek earlier this year. The firm has generated more than $1.2 billion in financing.

Xepelin also uses technology to gather public information from companies, such as data from tax agencies, creating a tool to better understand credit risk.

“We built not only a payment ecosystem between payers and suppliers where you can organize all your receivables and your financial life, but also where you can see all the companies in our network, in order to collect and pay better,” said Kreis, who also founded the Chilean security firm Safecard. “Its not only about services or credit, but also about costumers’ experience.”

(Adds backers in sixth paragraph.)