Digital Bank Klar Raises $70M in Equity Funding Led by General Atlantic

Mexico City-based digital bank Klar has raised $70 million in equity funding at a valuation of $500 million.

The raise follows a period of hypergrowth for the company. Klar experienced a "7x" year-over-year increase in revenue and 4x bump in transaction volume over the same time period, according to Klar co-founder and CEO Stefan Möller. Also over the past 12 months, Klar added 1.4 million customers and originated over $100 million worth of loans.

"We're starting to see the benefits of scale slowly starting to kick in," Möller told TechCrunch in an interview. "We've not only been able to gain traction, but we're also able to do it more cost-effectively and acquire more users organically." The executive declined to share hard revenue figures or total customers.

General Atlantic doubled down on Klar, leading its latest financing in addition to its $70 million Series B last July. Prosus Ventures, Quona Capital, Mouro, IFC, Acrew and Endeavor Catalyst also participated in the round. WTI provided $20 million in venture debt, Möller said. In total, the company has raised over $150 million in equity funding since its 2019 inception.

When Klar originally started, its mission was to become the "Chime of Mexico." But over time, that mission has evolved. To be fair, it's tough to compare the Mexican market to that of the U.S. considering that it is dominated by a handful of banks and the number of unbanked is estimated to be about 50% of a population that includes 75 million adults. On top of that, only about 15% have access to formal credit.

"One of the figures that we consider the most relevant with regard to our traction is that 40% of our users are getting access to financial products they historically didn't have access to, for the first time — through Klar," Möller said. "So not only is it a big market that we can compete for market share in, but it's a market that keeps expanding as we're able to serve different segments better than the legacy banks."

Today, Klar offers what it describes as a "100% digital, transparent, free and secure alternative to traditional credit and debit services."

For example, the startup claims that users can open an account online "in five minutes" through its app. No minimum balance is required and users are charged no fees. The company's card — powered by Mastercard — offers users cash back on all their purchases and allows them to make mobile payments and access buy now, pay later services. Users can get an advance on their salaries through direct deposit.

Also, Klar offers credit lines up to $20,000 pesos without referencing the users' credit bureau score.