Mexican Payment Startup Clip Lands US$100 Million Investment

Clip, a Mexican payment startup, has secured US$100 million in financing from Morgan Stanley Tactical Value and an unnamed West Coast investor. These funds are earmarked for expanding Clip's market presence in Mexico, according to Adolfo Babatz, founder and CEO, Clip.

Although specific terms of the recent funding round were not disclosed, the investment maintains the company’s valuation from its Series D round, which valued Clip at US$2 billion. Babatz referred to the second investor as “one of the largest and most experienced fund managers on the West Coast.”

Babatz emphasized that Clip’s core payment services, which make up over 85% of its business, are currently profitable. “We intend to double down on some of these areas,” Babatz said. “Depending on the stage of the business, we either deepen or broaden. Even in payments, there is still a lot of room to deepen because there are many opportunities and much space to grow.”

He noted that approximately 85% of businesses working with Clip previously only accepted cash. Babatz estimated that there is a trillion dollars in transactions waiting to be processed due to the widespread use of cash in Mexico.

In a previous funding round in June 2021, Clip raised US$250 million from SoftBank Group's Latin American fund and Viking Global Investors. The company currently employs around 800 people and expects to add 150 more employees in the coming years.

Venture capital investors have largely stayed on the sidelines after a funding boom in 2021 dried up in 2022 due to high interest rates in the United States, resulting in the worst year for startup investments in Latin America since 2018. However, Babatz sees opportunities for companies that show progress.

“There is a lot of money waiting to be invested in good, high-quality companies that are delivering results,” Babatz said. “I think that is our case. We are happy to share this news with the broader tech community in Mexico and Latin America, which I think is in need of very good news.”

While the window for IPOs in the United States is reopening, the possibilities will largely depend on the US macroeconomic environment, Babatz noted. Clip will be watching other emerging market companies in the coming months, though Babatz declined to disclose any plans for a future IPO.

Morgan Stanley Tactical Value, the bank's non-controlling private investment unit, will hold an observer seat on Clip's board.