Remittances from workers in the United States to their family and friends in Latin America amounted to 155 billion dollars in 2023. Faced with such a huge opportunity, banks, money transfer companies, retailers and fintech companies are trying to make transfers more convenient on both sides of the transaction.
Fast growing startup Felix Pago is one of these players, and recently raised a $15.5 million Series A funding round to grow its presence in Latin America and the US, TechCrunch has exclusively learned. Its main interface is WhatsApp, with a chatbot that simplifies sending and receiving cross-border money transfers, even with a voice message.
“I like to say that WhatsApp is the operating system of the region, so it makes sense for us to build something on WhatsApp to make it super easy,” CEO Manuel Godoy told TechCrunch.
WhatsApp itself already activated peer-to-peer transactions and the option for users to pay businesses via chat, but only in Brazil and India. But a broader rollout wouldn’t be bad news for Felix and similar solutions like OfferSend, Financial leap and Zapp — if users could use their card on WhatsApp, remittances would be just a click away, says Godoy.
Currently, Meta seems to view these third-party developments favorably. His WhatsApp for Business blog highlights the use case of Banco LAFISE of Nicaraguawho created a virtual assistant on WhatsApp to facilitate remittances.
But Felix Pago It has a broader scope. Apart from WhatsApp, which they already have installed, “users do not have to download any application,” Godoy said. On the US side, users fill out most transaction details through the WhatsApp chatbot; Only in the last step must they click on a link to securely fill out their debit card information. And on the other hand, money can be collected instantly in local currency as a bank deposit, but also in cash in a store.
Many times what recipients prefer is cash, so Félix Pago adapted to that reality and partnered to have over-the-counter pickup points in Mexico, Guatemala and Honduras. For an additional $1.99, “the sender receives a receipt with a unique identification number and sends this receipt to the beneficiary to show to the cashier so they can collect the cash.”
Much more is happening behind the scenes, thanks to the internal and third-party tools that Félix uses to meet its obligations and optimize its operations. There is KYC, AML and fraud prevention; and there are cryptocurrencies, said Godoy.
By using Circle’s USDC stablecoin, Félix Pago manages to save in foreign currency that can be transferred to users. The 24/7 availability of USDC also reduces Felix’s pre-funding needs, allowing him to make the first transaction for free, like his competitors Remitly and Western Union do. Felix then charges $2.50 on subsequent transactions to Guatemala and Mexico, while he opted to differentiated prices for Honduras. This generally makes fees much lower than SWIFT transactions, which are also slower.
“Cryptocurrencies are a powerful facilitator of remittances, but they must be abstracted from the user. The user doesn’t care about that. I always say it could be a donkey crossing the border, it doesn’t matter. What they want is the money, the local currency and they want it instantly at the best possible price. And cryptocurrencies allow it on the back end.”
With Félix reliant on USDC and its crypto partners, Godoy believes the domain expertise of its new lead investor, the Boston-based crypto fund Castle Island Businesses, makes him a welcome addition to your cap table. “We are already leveraging some of his portfolio companies to make our infrastructure more robust, and one of his partners, Nic Carter, is one of the leading experts on USDC. [and] stablecoins, so I think that gives us a lot of influence.”
Change companiesthe fund that led Félix’s project pre-seed extension round in 2023also participated again, as did investors who participated in its previous $2.5 million pre-seed round, including HTtwentyContour and MELI Capital, the corporate venture capital arm of the Latin American e-commerce giant Free marketwhose partnership with Félix gave the startup a significant boost.
Under that partnership, Mercado promotes Félix Pago among users of its Mercado Pago payments platform in Mexico. Those referrals represented 25% of their new users at that time.
A similar association with neobank Nubank He continued, giving another boost to Felix’s growth. “However, the good thing is that today we continue to grow approximately 30% month after month, but it is not only thanks to those associations,” Godoy said.
Referrals are its main growth driver, but the company also relies on influencer marketing and Facebook to make itself known among its target audience in the US. So far, the majority of its users are Latin professionals who work in the construction, food and home. services.
This makes Godoy confident that Félix will continue to be complementary to Nubank and Mercado Libre, even when the latter expands its fintech plans. (Reportedly searching a banking license in Mexico.) “They don’t have a product in the US, so ultimately the sender is a Félix Pago customer.”
Félix Pago also hopes to help these clients with more than just remittances. “The vision we have for Félix is to become the trusted companion of the Latino immigrant in the United States.” His roadmap includes a credit builder and, eventually, real credit.
However, first the startup will use its new funds to expand to El Salvador and Nicaragua, followed by the Dominican Republic and Colombia, and then the rest of Latin America. This is a necessity if Félix wants to advance further on its roadmap and have an advantage over other companies aspiring to the same place.
“To become that reliable companion of Latinos in the United States, we have to solve the problem [remittances] problem for all Latinos,” said Godoy.
