Cora, a Brazilian digital lender to small and medium-sized businesses, raised $ 116 million in a Series B funding round led by Greenoaks Capital.
This is a great B series by all accounts, but particularly for a Latin American startup. It’s also worth noting that São Paulo-based Cora only raised its $ 26.7 million Series A round – led by Silicon Valley venture capital firm Ribbit Capital – in early April. The startup has raised a total of $ 152.7 million since its inception in 2019.
The company was not active in the market, according to CEO and co-founder Igor Senra, but was approached by existing backer Greenoaks and other investors.
In fact, Tiger Global and Tencent are first-time backers in Cora with this latest round, joining existing investors Greenoaks, Kaszek, QED and Ribbit Capital.
“Greenoaks came to us and told us they were very impressed and ready to lead our Series B,” said Senra. “Their main goal was that they didn’t want us to spend time fundraising, but to stay focused on building the business. “
The pattern is similar to previous ones for Cora, which has also seen existing backers lead its previous rounds, which the company sees as a “strong signal that everything is going in the right direction.” The company declined to comment on the assessment.
Last year, Cora got its license approved by the Central Bank of Brazil, making it a 403 bank. Fintech then launched its product in October 2020 and today. offers a current account combined with a software layer that aims to help SMEs manage their finances. It is currently in beta with a limited user pool for a corporate credit card.
“Credit limits generally increase as customers use their accounts to receive money and pay for their expenses,” he said. “We see this product evolve over time to address any financial needs a small business owner might have.”
Since launching last October, Cora has grown its customers by 40% per month, according to Senra. During this same period, the company saw its transaction value / revenues increase by almost 60% per month. Today, the startup has more than 120,000 clients.
“It’s nice to see the volume growing even more than our customer base,” Senra told TechCrunch. “Our company must gain confidence in order to gain in volume. Once our customers feel that we are doing a good job serving them, the way to demonstrate it is to give us more volume.
The company says it is not yet profitable because it is focused on growth.
“But we already have a positive unit economy per customer,” Senra added.
Like a number of other fintechs, Cora’s model is that most of its offerings are free to its customers, but it mainly makes money through interchange fees.
For now, the company is focused on growing in Brazil, which is large and complex enough, Senra noted. He could consider moving abroad in three to four years, he said.
Currently, Cora has 150 employees, up from 68 at the end of last year and 40 a year ago. About 130 of its employees are “partners” of the company, Senra said.
Going forward, the startup plans to use its new capital for product development, growth, operations and building up a credit supply. It uses the data it generates “to provide much better credit” to its customers, Senra said, starting with credit cards, then receivables and other types of credit such as emergency credit or credit for investments.
“We try to deeply understand the needs of our customers and try to create products that they love,” Senra told TechCrunch. “We see ourselves as the opposite of traditional banks, which are generally not good at taking care of their customers. “
For now, Cora is focusing on B2B service providers, but Senra expects that by the start of next year, he can start exploring “other segments” such as others. types of SMEs.
“There is a total addressable market of 5 million businesses, so there is a lot of room to grow,” he added. “But we are striving to expand into other verticals.”
For his part, Patrick Backhouse of Greenoaks Capital believes that Brazil has a “huge” SME economy which has historically been “underserved by incumbent banks”.
“The existing services are expensive and inefficient, which creates opportunities for technology service providers to offer better and cheaper services,” he said. “We believe Cora is a one-in-a-generation company creating effective digital finance tools for small businesses. Since investing in the company’s A-Series, we’ve seen the momentum pick up and proof that this is a huge addressable market.