Santander InnoVentures makes investment into alternative SME lender a55

The company underwrites SMEs through a technology platform connecting bank accounts, escrow solutions, billing, payment means and credit intelligence.

Santander Group’s venture capital fund Santander InnoVentures has invested into a55, a Latin American income-secured alternative small and medium-sized enterprise (SME) lender.

This takes the number of fintech companies Santander InnoVentures has invested into to over 30. This is its fourth investment in Latin America.

a55 was founded in early 2018 by André Wetter and Hugo Mathecowitsch in Brazil and provides solutions in the alternative lending space, offering revenue-backed credit lines to companies with recurring revenue. It aims to become the financing platform for service-based companies in Latin America, starting with software-as-a-service (SaaS) businesses and has recently launched operations in Mexico.

The company underwrites SMEs through a technology platform connecting bank accounts, escrow solutions, billing, payment means and credit intelligence. Since the launch of its operations two years ago, a55 has underwritten 50 companies in Brazil and Mexico through 350 different operations, with MXN 150 million in Mexico and BRL 100 million in Brazil. The company expects to double those numbers in the next 12 months.

Manuel Silva Martínez, managing partner at Santander InnoVentures, will join a55’s board of directors and work together with the team to help expand their capabilities and product reach and explore possible area for partnering with Banco Santander around the region.

a55’s technology solutions include, for borrowers, a credit monitoring dashboard, an insights section on revenue and cost metrics, an integrated cash flow covenant management system and escrow and revenue lock up tools to redirect a portion of the borrowers’ cash flows. For lenders, a55 developed a portfolio management and monitoring platform fed in real time by transactional data.

a55 is backed by institutional lenders in Brazil, Mexico, the US and France providing the platform with liquidity to lend to Brazilian and Mexican SMEs. The company had previously raised $3 million in seed money from small Brazilian and international investors. Santander InnoVentures has been leading this round, which exceeds $5 million in total from different investors.