Sequoia enters Chile with investment in fund manager

A Chilean asset manager with funds named after Hollywood stars including Conservative Clooney, Moderate Pitt, Risky Norris and Very Conservative Streep, is Sequoia Capital’s latest gamble on the region’s burgeoning fintech industry.

Fintual Inc. obtained US $ 39 million from investors led by Sequoia with funds intended primarily to accelerate its growing operations in Mexicosaid the founder and CEO, Pedro Pineda.

“Our challenge for the next 18 months is Mexico, Mexico, Mexico“, said Pineda in an interview via Zoom. “Chile is our main market at the moment and our plan is for Mexico to become our main market within one or two years.”.

This is the first investment in Chile by Sequoia. The Menlo Park-based firm has invested in other regional startups, such as travel website Despegar.com, Nubank bank and delivery service. Rappi.

Fintual it is part of a larger contingent of startups using technology to dramatically change Latin America’s financial industry. Companies like the Brazilian Nubank They have become multi-million dollar companies selling cheaper and easier-to-use products in a region where commissions are notoriously high and service is unsatisfactory.

Fintual was founded in 2018 and offers savings and investment options through an online platform. Pineda said it was the first financial services company in Chile and Mexico that you can do new customer onboarding completely online without having to sign a single document.

Fintual manages US $ 665 million in assets for more than 70,000 clients through passive strategies, primarily through exchange-traded funds. The weighting of the ETFs in each fund is periodically reviewed by its own algorithms and a small team of investment managers.

Fintual should reach $ 1 billion in assets under management in Chile and Mexico in the next three or four months and around US $ 2 billion by the end of next year, he said Pineda. Chilean mutual funds had about $ 60 billion in assets under management at the end of September, according to the regulator.

The company began operating in Mexico last year and in July it acquired funds distributor Invermerica for an undisclosed amount. The company claims to have grown its assets under management in Mexico by 45% in the last month alone.

Fintual made about $ 15 million in a Series A round of Kaszek Ventures earlier this year and Sequoia contacted them shortly after to express interest in joining the company, he noted Pineda.

Fintual plans to launch a “group investments”That will allow customers to save together for a common goal. Participants will be able to see the progress of the group’s investment while maintaining control over their own stake. A group of friends can save, for example, for a joint trip, projects or other investments.

In the future, Fintual can launch new products such as a dollar savings account for retail customers and a debit or prepaid card that invests unused balances in funds from Fintual instead of getting no return, Pineda said.

Venture capital investments have grown to record levels in Latin America as funds seek options amid volatile equity and bond markets and political concerns.

In the third quarter alone, venture capital investments reached $ 5.1 billion, bringing the total for the year to date to a record $ 11.5 billion, according to the Latin American Association of Venture Capital and Private Equity, Lavca .