Co-CEOs Nick Grassi and José Luis López founded the business in 2018 with the goal of facilitating the legal exchange and use of financial data and data analytics throughout Latin America.
Before before, American Grassi had travelled to Mexico as a Fulbright Scholar. He started working at Deloitte Consulting Mexico as part of that, which is how he got to know Lopez.
“We were tasked with starting the early fintech practise, and the industry itself was just getting started,” Grassi said in an interview with TechCrunch in 2016. “We were assisting numerous businesses, including banks, payment processors, and insurance providers, in understanding the potential implications of the fintech revolution.”
Grassi claims that shortly after its release, Finerio ranked as the fourth most downloaded fintech app of the year. After a year, the company added around 250,000 customers in Mexico.
The fintech law in Mexico was released around that time. It was among the first Latin American nations to regulate the sector. Since it is well known that Mexicans have mistrust for banks, an estimated 70% of adult Latin Americans are either underserved or unbanked at the moment. Transparency was one of the main topics covered by the new law.
According to Grassi, not much has changed in the last five years regarding the legislation. But he and Lopez also observed early indications of a shift towards open banking regulation, which was being pursued by Brazil and Colombia. In the meantime, Finerio was receiving requests from overseas banks, insurers, and other fintechs to make its technology available.
“We realised there was a need, so in 2020 we made the decision to change the company’s focus to business-to-business so that we could process and analyse data, link bank accounts, and create a white label personal finance experience,” Grassi said.
Finerio now collaborates with more than 120 fintechs and financial institutions. The business started testing an API hub with Visa and OzoneAPI in many nations last year. Digital payments, credit, and personal finance management are among the goods and services provided by the hub. Additionally, it gives financial firms a location to adhere to the new rules on open banking.
The API has been used 700% more in the last 18 months, according to Grassi. In the upcoming year, Finerio plans to expand its reach to an additional forty financial institutions. Customers pay a minimum use price to the provider, and then there is an additional variable fee based on the amount of data they use. Finerio had recurring income of over $1 million in the previous year.
Leading the new $6.5 million equity investment was Third Prime, with participation from Bancolombia Ventures, Visa, and Credicorp’s venture capital arm, Krealo. Included in the group of angel investors were Alaya Capital, Gaingels, Plug and Play, Winklevoss Capital, and Guiabolso, Dock, and ClassPass. The business had previously raised about $3.2 million in SAFE notes.
Mike Kim, general partner at Third Prime, stated in a written statement, “We believe that government support of open banking initiatives across LatAm, combined with the enormous population of underserved consumers, creates a tremendous opportunity to create value for investors and to meaningfully increase the financial well-being of historically disadvantaged consumers.”
certain of the monies have already been used by Grassi to make certain important recruits, such as José Santacruz López, the former chief technical officer of Kushki. The business plans to increase use overall and open up its API hub in two more nations.
“Our goal is to unify several banks by developing what we refer to as ‘the HTML of open banking,'” stated Grassi. “Although it’s a fairly complicated product, we’re running a few pilots and receiving a lot of interest.” We want to take our time in turning pilots into paying clients.