Mexican challenger bank Albo raises new cash

Darren Sinden

In a rapidly developing economy in which half of the population do not have a bank account, yet over 60% of citizens own a smartphone, Albo sees an opportunity, as clearly do its VC investors

The fundraising rounds continue for challenger and neo banks, this time Mexico’s Albo being the subject of fresh investment.

The business, which describes itself as Mexico’s leading challenger bank, secured $45 million in new funding from investors such as Valar Ventures, Greyhound Capital and Flourish Ventures.

Albo has raised a total of $72.10 million through 5 funding rounds. The banking start-up has amassed almost half a million customers and has established a network of 30,000 retail locations, where its representatives can take deposits from Albo customers.

Albo’s business model is aimed at exploiting a liberalisation of the banking and fintech sectors in Mexico along with initiatives which are designed to increase access to such services in an economy in which half the population does not have a bank account.

Albo’s customer base of around half a million customers represents 40% of the Mexican digital banking market according to data from Apptopia. That figure contrasts sharply with a population in Mexico of 128 million people.

The average age in Mexico, however, is just under 28 year of age and 83% of its population live in urban areas, 12 million of whom are in the capital Mexico City. Added to this, 60% of the population owns or uses a smartphone, so there is clearly an opportunity for Albo and other digital banking services.

However, although wages in Mexico have been improving over the last five years, they only average around $20 per day according to data from the Secretariat of Labour and Social Welfare.

Despite this, Albo intends to use the money it raised this week to expand its offering beyond a bank account and pre-paid debit card and to move into insurance and micro-lending products.

Albo faces competition from established banks, many of which are foreign-owned by the likes of BBVA, Santander and HSBC, of which BBVA Mexico is the largest.

Of course, the banking sector in Mexico, like much of the real economy, has to operate in the shadow of money laundering and the notorious cartels, which creates its own challenges. Just this week the Mexican Senate passed legislation that would oblige the country’s central bank to “buy up” excess cash that commercial banks cannot return into the financial system.

These new rules were suggested as a way to help migrant workers to pass on cash, which previously introduced tighter financial controls have made difficult.

However the proposals have angered the central bank which feels its independence is being compromised, and commercial banks who believe such arrangements could be open to abuse by money launderers. The bill has yet to be passed into law and will need to be approved by the lower house in the Mexican legislature before it is.

Read this next

Digital Assets

Alameda sues Voyager Digital to recover $445 million

FTX’s failed trading arm, Alameda Research, asked a court to claw back $445 million from Voyager Digital, which it said SBF’s empire paid to the crypto lender before collapsing into bankruptcy.

Metaverse Gaming NFT

Toyota taps Astar Network to explore Web3 in grand style

Although the crypto ecosystem has faced its fair share of bumps, Japanese automaker Toyota is seemingly bullish about the space and continue to look at Web3 as a promising opportunity.

Digital Assets

Bitcoin dominates inflows into crypto funds, AuM hits $28B

As the price of bitcoin continues to consolidate around recent highs, investors expand their positions in funds designed to profit from further appreciation in the cryptocurrency.

Institutional FX

Fiserv secures major payment institution licence in Singapore

Brookfield-based financial services technology provider Fiserv Inc has obtained nod for a Major Payment Institution license in Singapore.

Institutional FX

Finalto expands NDFs line-up with Taiwanese dollar

Finalto announced today that it has expanded its non-deliverable forwards (NDFs) offering with the addition of Taiwan’s dollar to its trading platform.


It’s time for FX to Harness Crypto’s Potential

Jonathan Cumberlidge, FX Sales Director for BVNK, makes the case for cryptocurrencies in improving the efficiency and flexibility of foreign exchange trading.

Digital Assets

Owner of OptionMint, OptionKing, and OptionQueen gets 30 months in prison

A US federal judge has sentenced Ohio resident Jared Davis, who was found guilty for his participation in a multi-million fraud scheme carried out by Israeli-run binary options websites.

Executive Moves

iS Prime co-founders Raj Sitlani and Jonathan Brewer leave, but “business as usual”

“For our clients and teams at iS Prime, iS Risk and iS Prime Hong Kong, it is business as usual. We will be increasing our investment in our technology and staff, putting our clients first as we drive the business forwards to maintain our market leadership position.”

Digital Assets

Germany-focused DekaBank taps METACO for digital asset custody offering

“Digital assets are a critical part of the future, a radical new way for how assets will be represented, from currencies to real estate.”