Payroll Disruptor Secures Huge Seed Round in Mexico
Mexican fintech minu has completed one of Latin America's largest seed funding rounds. The payroll company has secured US$6.5million in investment from an assortment of venture capital and angel investment firms.
Venture capital funding has come from QED Investors, Next Billion Ventures, Mountain Nazca, and Village Global.- a Silicon Valley fund backed by such luminaries of tech as Bill Gates, Jeff Bezos, and Mark Zuckerberg. Angel investors in the round include the founders of PayU and Cornershop.
Minu's service allows hourly paid workers in Mexico to access earned funds before their set payday. Financial liqudity is a daily problem for many Mexicans, according to the CEO Nima Pourshasb, "75% of Mexicans live from paycheck to paycheck with no savings for contingencies, 33% get loans from family, friends or institutions to cover their recurring expenses."
Rather than offering lending, Minu allows hourly paid workers to withdraw the money they have already earned in advance of their scheduled payday. The HR department of participating companies provides data to the company and don't need to change their procedures or incur any costs.
Workers pay a flat fee of around US$2 per withdrawal, in line with fees paid to withdraw cash from an ATM in the country. Their HR department can set limits such as the percentage of salary available, maximum withdrawals per cycle, minimum withdrawal amounts. The company claims that employee retention rates are 10% for companies enrolled in the scheme.
Speaking of the funding deal, QED partner Matt Burton said, “… we believe that the experienced minu management team will lead this category and impact millions of lives positively.”