CHAPTER 7: TECNOLATINAS PROFILES
The leading network of financing P2P in Latin America
Founded in Argentina in 2010, Afluenta is one of the most disruptive companies the Fintech sector has seen, not just in Latin America, but around the world. A peer to peer lending platform, this startup brings investors and borrowers together, allowing the first ones to loan money to the second ones, and profit from the interests.
Through the use of proprietary technology, this company is able to cut down the middleman, which enables it to offer loan takers a less bureaucratic experience, and a more flexible approval process, while offering investors – both individual and institutional – a better yield than they would get by investing their money in a time deposit or on other traditional banking products.
The company has become an undisputed market leader in Argentina, where it has a community of over 330 thousand users, has already granted more than 5,700 credits for over $153 million Argentine pesos, and has generated over $37.3 million Argentine pesos in interests that were paid back to investors. Adittionally, the company is operating in Mexico and Peru, where in just a few months it got over 58,000 credit requests, outperforming the Argentine version of the site on its first year of life.
Built on a solid mobile-first technological platform, the company makes it very easy both for borrowers and lenders to start operating. In order to take a credit, users must comply with a very basic set of conditions, and be subject to a brief credit check process that allows the platform to certify they are able to pay back. Unlike the banking system, Afluenta targets low income sectors, who don’t qualify for traditional loans. Before granting a loan, the system qualifies each user into one of five categories, according to her income, and history paying in term. This qualification will be crucial to determine the interest rate at which the credit will be offered.
Once these variables are calculated, each solicited credit is published at the platform’s auction board, where investors can check out every particular case and invest their money, or part of it.
For lenders the process is also very simple, as it allows them to invest small sums of money, and distribute it among credits given to borrowers with different ratings. Lower ratings produce a higher return of investment, albeit at higher risk.
The company’s business model is simple, and it is based in charging a commission from people using the platform both to borrow and to lend.
This simple system is allowing thousands of Latin Americans to have access to credit, something that was not available for millions of people in the region, where in most countries bancarization levels sit below 50%.
Afluenta was founded by Alejandro Cosentino, who before becoming an entrepreneur had over 20 years of experience working on banks and financial instititutions; and by Federico and Ezequiel Guilleron. The project was conceived with the idea to simplify access to financial services, and to make them simple. According to Cosentino, who sits at the helm of the organization in his role as CEO, few people feel passion about the financial sector, and most don’t understand enough as to make sound financial decisions. For that reason he thought this platform would be a way to positively change the world, making it fairer, and more equitable.
While this project had been on the entrepreneur’s mind for many years, it wasn’t until 2010 him and his team started working on bringing it to life. In 2011 the company landed its first investment, in the form of $75 thousand dollars from NXTP Labs which allowed it to get started. After launching their product, the company underwent a Series A round in February 2013, raising $2 million dollars, and a subsequent Series B in March 2016, where it raised $8 million dollars from International Finance Corporation, and Elevar Equity.
Besides its brand recognition in the region, and the fact that it was able to offer a very distinctive service that differentiates it from traditional banks and financial institutions, one of Afluenta’s biggest assets is the trust it has managed to generate from its community. Both borrowers and investors trust the platform enough to deposit their money, or to place their financial future in its hands.
In the short term the company is working on internationalizing its services further, with upcoming launches in Brazil, Colombia, and Uruguay. In only a few years, Afluenta has managed to disrupt the financial services sector in all the markets it has launched its operations at, and has become one of the poster boys for the power technology has to provide access to credit to portions of the population that were previously excluded.
A highly innovative company, we will surely hear more about Afluenta in the years to come, as it continues its growth and its positioning as one of the undisputed leaders in the Latin American fintech industry.
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