Investing in Grupago
Grupago is pioneering digital microcredit for SMBs in LatAm.
We are excited to embark on a transformative journey alongside Grupago – a fintech startup poised to revolutionize the landscape of small and medium-sized business (SMB) financing in Latin America.
The company’s vision is clear and ambitious: to become the first fully digital microcredit provider for SMBs in LatAm.
What gap does Grupago fill?
A staggering 90% of businesses in Latin America fall into the SMB category, generating nearly a third of GDP. These businesses, often operating in traditional sectors and offline realms, face a formidable roadblock: securing the necessary credit to fuel their growth. The most significant need lies in extending credit to micro-SMBs situated in smaller Latin American towns.
On the traditional lending side, established banks and traditional group lending companies exist. However, banks have largely overlooked this underserved segment, deterred by the inherent complexities involved. Traditional group lending companies are also constrained by the costs associated with in-person branches and infrastructure, and lack a digital approach to lending.
On the fintech side, existing credit card companies focus their attention on mid and upper-market segments (e.g. NuBank) and lower-end segments (e.g. Bankaya and Stori Card), while bigger SMB lenders (e.g. Fairplay and Covalto) prioritize much larger credit lines from established companies that can provide formal collateral.
A noticeable void persists in the market – a distinct lack of credit providers dedicated specifically to micro-SMBs. Grupago is stepping in to bridge this gap and chart new territory.
What is Grupago’s approach?
In order to establish itself as the premier digital microcredit provider for SMBs in Latin America, Grupago’s strategy is underpinned by cutting-edge AI, group collateral concepts, and community distribution.
Let’s delve into the company’s approach:
AI-Driven Underwriting: Grupago harnesses the power of AI and taps into non-traditional data sources to underwrite small loans and credit card lines. Over time, they systematically expand credit limits as customers demonstrate successful repayment histories.
Group Collateral: The company offers larger loan sizes by leveraging the concept of group collateral, effectively mitigating risk. This approach allows Grupago to serve this underserved customer segment profitably, a feat that traditional banks and other fintech players have struggled to achieve efficiently.
Community Distribution: Grupago engages community leaders online to establish lending circles within their local areas. This strategy enables the firm to connect with customers in rural and traditionally inaccessible locations through an innovative and economical online-to-offline outreach method.
Who is behind Grupago?
Behind Grupago stands its founder and CEO, Uri Pomerantz – a leader whose path embodies a wealth of experience and a profound commitment to innovation. Uri’s journey began in Israel before going to Stanford for college. He went on to Stanford and Harvard for graduate school, and spent time honing his skills at Goldman Sachs and McKinsey & Company.
We first met Uri when he started Twine, an early consumer-fintech application ultimately acquired by John Hancock Insurance. He then spent some time as a venture investor before deciding he was better suited to building businesses. We’re very thankful that he came to that realization, and we think he is in a position to create something extremely powerful.
What struck us about Uri is somewhat of a rarity among people with the experiences and credentials he has already collected – his desire to learn from those around him. This desire is a critical component of a Deciens-founder fit, given our unique style of co-building with our portfolio companies. We look forward to the journey ahead as we warmly welcome Grupago into our fold.
We just announced Grupago’s seed financing – read more about it here.
