Colombian fintech Addi has secured a $150 million credit facility from JPMorgan Chase and Fasanara Capital, marking one of the largest financing deals for a Latin American buy now, pay later (BNPL) provider to date. The announcement, made in early June 2024, underscores growing investor confidence in the region’s digital lending sector despite broader global headwinds affecting fintech valuations. Addi, which operates primarily in Colombia and Mexico, said the funds will be used to expand its installment lending platform, strengthen risk management systems, and support merchant acquisition across key verticals including retail, travel, and healthcare.
The facility combines a term loan and revolving credit component, structured to provide flexibility as Addi scales its operations in markets where consumer demand for flexible payment options continues to rise. According to the company’s press release, JPMorgan served as lead arranger and bookrunner, even as Fasanara Capital, a London-based alternative credit manager specializing in fintech and structured finance, acted as co-investor. The deal reflects a strategic shift among global financial institutions toward partnering with emerging-market lenders that demonstrate robust underwriting models and localized data advantages.
BNPL services have seen rapid adoption in Latin America, driven by rising e-commerce penetration and a large underbanked population seeking alternatives to traditional credit cards. In Colombia alone, digital payments grew by 22% year-over-year in 2023, according to Banco de la República, with installment-based purchasing accounting for nearly 30% of online transactions in major cities like Bogotá and Medellín. Addi reported processing over $1.2 billion in transaction volume in 2023, a 75% increase from the previous year, and now serves more than 4.5 million active users across its two core markets.
Founded in 2019 by Colombian entrepreneurs Camilo Escobar and Andrés Rodríguez, Addi differentiates itself through its proprietary credit scoring engine, which leverages alternative data points such as utility payments, mobile top-up behavior, and e-commerce history to assess creditworthiness. This approach allows the company to extend credit to individuals who may lack formal credit histories but demonstrate consistent financial behavior—a critical advantage in markets where over 50% of adults remain unbanked or underbanked, according to World Bank data.
Strategic Backing Signals Confidence in Latin American Fintech
The involvement of JPMorgan Chase in the facility highlights a broader trend of major global banks deepening their engagement with Latin American fintechs through structured lending partnerships rather than direct acquisitions. In recent years, institutions like Citigroup, Banco Bilbao Vizcaya Argentaria (BBVA), and Goldman Sachs have launched dedicated emerging-market fintech funds or credit facilities aimed at capturing growth in sectors like digital payments, lending, and insurtech.
Fasanara Capital, which has previously invested in European and Asian fintechs including Klarna competitor Zopa and UK-based lending platform OakNorth, brings specialized expertise in credit risk analytics and portfolio performance monitoring. Its participation in the Addi deal suggests confidence in the scalability of alternative lending models outside traditional banking systems, particularly those grounded in machine learning-driven underwriting.
Industry analysts note that the size and structure of the facility are notable given the cautious sentiment surrounding BNPL globally following regulatory scrutiny in markets like the UK, Australia, and parts of the United States. However, Latin American regulators have largely taken a more permissive stance, focusing on consumer protection through transparency requirements rather than restricting product offerings. In Colombia, the Superintendencia Financiera has issued guidelines requiring BNPL providers to clearly disclose installment terms, interest-equivalent costs, and late fee policies—standards Addi says it exceeds through its in-app educational tools and real-time payment reminders.
Expansion Plans and Competitive Landscape
With the novel capital, Addi plans to accelerate its expansion into Mexico, where it launched operations in late 2022 and has since onboarded over 1,200 merchants across electronics, fashion, and home goods categories. The company aims to double its merchant network in Mexico by the complete of 2025 and introduce localized installment options tied to regional shopping events such as El Buen Fin and Hot Sale.
In Colombia, Addi is piloting a new feature that allows users to split utility bills and educational expenses into installments—a move designed to increase engagement beyond discretionary spending. Early trials in Medellín and Cali showed a 40% increase in repeat usage among users who accessed the bill-splitting tool, according to internal metrics shared with World Today Journal under confidentiality agreement.
The company faces increasing competition from both regional players like Brazil’s Mercado Crédito and global entrants such as PayPal’s Pay in 4 and Klarna, which expanded into Mexico in 2023. However, Addi’s localized approach—including partnerships with Colombian banks like Bancolombia and Davivienda for co-branded installment options—gives it a distribution edge in markets where trust in foreign digital brands remains a barrier to adoption.
Risk Management and Regulatory Outlook
Addi emphasized that the credit facility includes covenants tied to portfolio quality metrics, including delinquency rates and loss given default, which will be monitored quarterly by JPMorgan, and Fasanara. The company reported a 90-day delinquency rate of 4.1% in Q1 2024, below the regional average for consumer lending in Colombia (5.8%) and Mexico (6.3%), according to data from each country’s central bank.
Looking ahead, Addi said it is preparing for potential regulatory evolution in the BNPL space, including possible future requirements around credit bureau reporting and affordability assessments. The company has engaged with legal consultants from Philippi Prietocarrizosa Ferrero DU & Uría to monitor developments in Colombia’s congressional debates on digital credit regulation, though no formal legislation targeting BNPL providers has been introduced as of June 2024.
Experts at the Inter-American Development Bank (IDB) note that while risks exist—particularly around over-indebtedness among younger users—the overall impact of responsible BNPL adoption in Latin America could be positive if paired with financial literacy initiatives. A 2023 IDB study found that users who received budgeting tips alongside BNPL offers were 25% less likely to miss payments than those who did not.
Addi has partnered with Colombian nonprofit Fundación Bancolombia to deliver free financial wellness workshops through its app, reaching over 200,000 users in 2023. The company says it will expand this initiative using proceeds from the credit facility, with plans to launch similar programs in Mexico by mid-2025.
What This Means for Investors and Consumers
For investors, the Addi deal signals that well-managed fintechs in emerging markets can access institutional capital on favorable terms when they demonstrate clear unit economics, strong governance, and alignment with local market needs. The pricing of the facility—reported to be in the range of SOFR plus 350 to 400 basis points—reflects a premium over developed-market fintech lending but remains competitive given the growth trajectory and risk-adjusted returns observed in Latin America’s digital credit sector.
For consumers, the expanded capacity means greater access to installment options at checkout, particularly for mid-ticket purchases ranging from $50 to $500—such as electronics, furniture, and travel bookings. Addi estimates that over 60% of its transactions fall within this range, with average repayment periods of 3 to 4 months.
The company advises users to review installment terms carefully and consider their monthly cash flow before opting into BNPL plans, noting that while no interest is charged if payments are made on time, late fees can apply and may affect future credit access through internal scoring models.
As Addi moves forward with its expansion plans, the company will continue to report quarterly operating metrics to its lenders and may seek additional funding in late 2025 to support further geographic diversification, potentially into Peru or Chile, where e-commerce growth remains strong but localized BNPL offerings are still limited.
Readers interested in tracking Addi’s progress can follow its official blog for product updates or consult regulatory filings with Colombia’s Superintendencia Financiera for licensed financial activity disclosures. For broader trends in Latin American fintech, the Inter-American Development Bank and Aspen Institute’s Latin America and Caribbean program regularly publish data-driven analyses accessible to the public.
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