Wall Street Banks Funding More Startups in Latin America

Bloomberg Línea — Goldman Sachs (GS) has granted a $140 million credit line to Chilean fintech Xepelin in yet another case of Latin American fintechs raising debt financing with credit lines instead of equity investment.

Credit lines with banks allow companies to capitalize without diluting equity, as opposed to with venture capital rounds.

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Mexican Unicorn Clara Lands $150M Goldman Sachs Credit Line

The fintech will use the cash to weather the crisis while strengthening its finance team with a focus on mitigating risk

Data from the Association for Private Capital Investment in Latin America (LAVCA) show that venture capital investments for Latin American startups fell by about 19% in the first half of 2022 compared to the same period of 2021, which was a record year for investment in the region.

If venture capital used to be virtually the only option for startups to get money, now traditional banks, including those on Wall Street, are lending.

In addition to Santiago-based fintech, which offers services such as payments and credit for small and medium-sized businesses, on Tuesday, Mexican payments provider Clip secured a three-year, $50 million unsecured revolving line of credit with Morgan Stanley, JP Morgan, and HSBC (HSBC).

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LatAm Fintech Challenger R2 Raises Series A Featuring Adam Neumann’s Family Office

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Last month, Goldman Sachs provided a $150 million collateralized credit line to Mexican loan and expense management firm Clara.

The US bank also lent $233m to Mercado Libre (MELI) in July, participated in Nubank’s (NU) $650m credit line earlier this year, and provided $160m to support Mexico’s Konfio last year.

-- With information from Bloomberg News

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Fintech Xepelin Gets $140 from Goldman Sachs to Finance a Mexico Expansion