Mexico’s New Trend: Salary On-Demand
Mexican Fintech startup Minu just raised US$14 million in capital through a Series A funding round, reported Forbes Mexico. Minu’s investment round was led by FinTech Collective along with contributions from VEF, XYZ Ventures and FJ Labs, reported CrowdFund Insider. DocuSign’s founder Tom Gonser, Gusto’s CFO Mike Dinsdale, Next Billion Ventures and Village Global also invested in Minu’s latest round.
With this new capital, which includes US$2.5 million worth of debt from Sabadell Bank Mexico, the company has reached a total of US$20 million to accelerate its growth. Founded by entrepreneurs Nima Pourshasb, Rafa Niell and Paolo Rizzi, Minu aims to solve the liquidity gap employees face between paydays, due to unexpected bills, through the concept of “on-demand” salary. Minu provides employees instant access 24/7 to their next paycheck through a small fee, reports Expansión. To date, Minu has over 100 large enterprise clients, such as TotalPlay, Telefónica, Scotiabank, OfficeMax, Rappi, Adecco, Manpower and Cap Gemini. It also caters to public sector clients including the Electoral Institute of the State of Mexico, reports CrowdFund Insider.
“We are very happy about the new capital funding we received and for the validation that investors are giving to the work we do. This allows workers to access their salary when they need it, at any hour of the day,” explained Pourshasb to Forbes Mexico. This capital funding round will allow the company to increase its presence in and out of the country. “We have a large acceptance rate. Sixty percent of employees are registering on our app and we see that this product is being used a lot. With this new capital funding we will be able to open in more places in the country,” said Pourshasb to Expansión Política.
“We managed to grow month after month between 30-40 percent. Now, with this capital we can grow at an even faster pace,” Pourshasb told Forbes Mexico. On-demand salary is something that empowers users because it allows them to face unexpected expenses readily, she argues. “Companies feel good with this solution because it does not represent a cost for them; there are no payroll changes nor a larger administrative burden. About 92 percent of companies love the app,” said the Co-Founder to Expansión Política. Minu explains that the number of transactions increased following the pandemic, so now it only charges a fee in the first two transactions every user makes through the app.
With this new capital funding, Minu aims to strengthen its sales team and work with more companies. It will also explore new financial products, such as savings accounts and insurance to get closer to employees and improve its relationship with them. Finally, the company will push forward its international expansion plans to different countries in Latin America, which it hopes to start in 2022, reports Forbes Mexico.
According to Pourshasb, Latin America will not be exempt from the financial transformation that on-demand salaries are creating. “I believe there will be a time when we find it odd that people used to be paid on a fortnight basis,” expressed the Co-Founder to Forbes Mexico. Other companies betting on bringing technological solutions to payroll services in Latin America include Mexican company Runa HR, which states that the region is adapting to a new financial and technological era. Read more about it here