YoFio, a Mexico-based financial technology (fintech) company that promotes financial inclusion for microbusiness owners, has plans to seek investors for a future Series A round. YoFio says the investment raised will be used to expand its operations, allowing it to serve more businesses across Mexico and, eventually, the rest of Latin America.
CO-founded in 2019 by financial services executive Alberto Bonetti, YoFio initially focused on allowing unbanked consumers purchase groceries on credit from affiliated stores. As time passed, it received inquiries from store owners and other microbusinesses who were looking for access to credit that will help them grow their businesses. In 2021, YoFio pivoted its business model, now primarily catering to microbusinesses that, due to trading primarily in cash, are often excluded from financial services. This lack of support is hampering the growth prospects of Mexican microbusinesses, despite making up more than 90% of businesses in Mexico, as well as employing nearly half of the workforce and generating 14.6% of GDP.
Through its innovative app and technology platform that uses artificial intelligence, machine vision, YoFio is able to quickly assess a business’ inventory status and financial health, allowing it to extend a line of credit, ranging from 7,000 to 200,000 Mexican Pesos. Entrepreneurs can use their line of credit to purchase inventory for their business without having to spend their cash on hand and with no interest for a 14-day period.
The Series A round, which is expected to open at a later date, comes after a successful USD10 million equity-plus-debt seed round led by Oikocredit, a Netherlands-based impact investor. Other participants in the seed round include 500 Global, Innogen Capital, G2 Fintech Fund, Cauris Finance and other angel investors.
Since pivoting its business model, YoFio has continuously grown its technological and operational capabilities, including improved risk management and decision-making. The product focuses on purchasing inventory on credit rather than just providing cash loans, ensuring that the funds are properly utilized for the business.
According to Bonetti, YoFio is focused on growth, building on its solid foundations. The company is expected to achieve profitability by mid-2024, and it is currently working mostly in the Greater Mexico City area. To date, it has 3,600 loans, totalling USD8 million, currently deployed. By the end of the year, YoFio aims to expand its client base to 5,000 businesses, with a total of USD16 million in loans. YoFio is also planning to expand its operations to other regions in Mexico, with other countries in Latin America as part of its medium- to long-term trajectory.
“Microbusinesses are indispensable to the economy of Mexico and other Latin American countries,” Bonetti says. “However, many of them are struggling with cash flow issues, threatening their businesses’ sustainability. Our mission is to boost financial inclusion in the microbusiness sector by offering entrepreneurs with an easily accessible line of credit, allowing them to purchase inventory and invest in their businesses, fuelling growth. To do this, we are seeking investments from various sources, such as angel investors, impact investment funds, and other socially minded enterprises. With YoFio set to achieve profitability soon, we believe that this business model works, creating a win-win situation for all.”
Media contact:
Name: Alberto Bonetti
Email: [email protected]
