LatAm Fintech R2 Raises $5.9M to Provide Capital for SMBs

The company is an embedded lending infrastructure provider and already has clients such as Rappi, Clip and Kushki

R2's co-founders: Roger Larach and Roger Teran
February 03, 2022 | 12:00 PM

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New fintech challenger R2 announced on Thursday that it has raised a $5.9 million Seed round led by General Catalyst. Family office 166 2nd and Y Combinator also participated in the fundraising.

Entrepreneurs Roger Larach and Roger Teran are originally from Central America and decided to found the startup to help small and medium-sized businesses (SMBs) in Latin America access capital. Honduran, Larach is the CEO of R2. He comes from a family of entrepreneurs and says he has noted how it was difficult for SMBs to get capital, especially when the pandemic hit these companies.


“We saw a lot of small and medium-sized businesses going online, cash decreased by 35% in the region, and more than 10 million consumers made their first purchase online. SMBs in LatAm are going online through different platforms, Rappi, iFood, and all these platforms that process the sales for SMBs have a lot of data,” Larach says.

The founders’ idea is to solve the credit gap in Latin America by leveraging the transaction data that these marketplaces have. Teran has a data-science background, and is the chief data officer at the startup, while Larach comes from a finance background. Prior to founding R2, he worked at Argentina’s neobank unicorn Ualá and had a stint working in M&A in New York.

R2 attended a Y Combinator bootcamp last year. Now, proceeds of the Seed round will help the company build the team.


The fintech says it has been a “multi-latina” company from day one, with teams distributed across the Americas, with a head of finance in New York, engineers in Uruguay, besides teams in Chile, Colombia, Mexico, Argentina, and Brazil.

The team of engineers, data scientists, and credit experts bring experience from companies such as Google, Mercado Libre, Ualá, Uber, J.P. Morgan, McKinsey, and Xapo. Larach expects that a regional-based scale helps build the business with a lower cost of capital.


R2′s tool works as an embedded lending infrastructure. It provides the infrastructure behind platforms such as the delivery giant Rappi in Ecuador, fintech Kushki in Colombia, and POS unicorn Clip, in Mexico.

These platforms can provide capital to merchants while R2 takes care of the loan offer, authentification, compliance, and collections. “We disburse the capital, and the platform provides financing to SMBs powered by our tool, so we’re a Lending-as-a-Service provider that enables platforms to provide capital to SMBs,” Larach says.


R2 allows companies to become capital providers starting with loans, and it is also deploying the B2B buy now, pay later model across billing platforms. In the future, it wants to aggregate more credit products.

The loans that the fintech provides are revenue-based financing. “Platforms have data, customers, and the cash from the sales, so we’re taking a percentage of those sales for the collections.”

Fintech infrastructure players in Latin America are hot at the moment. Argentina-based Pomelo, for instance, recently raised $35 million from Tiger Global. Pomelo focuses on issuing cards to any company, embedding financial services through an API building neobanks.


On its behalf, R2 focuses on loans. “SMBs need capital, they don’t need a card,” says Larach.

Read More: Fidelity Buys Stake in Creditas, Valuing Startup at $4.8 Billion

While in Brazil, credit fintechs such as Creditas usually raise money from the Brazilian vehicle FIDCs (Credit Rights Investment Funds), R2 raises debt from Family Offices and equity investors to provide the loans.

So far, the new challenger says it financed more than 700 small businesses in Latin America across multiple platforms. “We want to fund hundreds of SMBs every month, allow any platform to integrate with us, and we want to keep building an amazing team, with data engineers and software engineers, as we’re a data-driven company,” says the CEO.


The fintech aims to originate more than 5,000 loans to SMBs across different countries this year.

“We want to have a direct impact on Latin America’s economy since SMBs in the region generate 67% of the jobs. We want to solve this credit gap, our loans are going directly to businesses to invest in CAPEX, working capital,” Larach says.

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