Remittances from US workers to their families and friends in Latin America amounted to $155 billion in 2023. With such a huge opportunity, banks, money transfer companies, retailers and fintechs are trying to make transfers more convenient on both sides of the transaction.
Fast growing startup Felix Pango is one of those players and recently raised a $15.5 million Series A funding round to grow its presence in Latin America and the US, according to TechCrunch exclusively. Its main interface is WhatsApp, with a chatbot that makes it easy to send and receive cross-border money transfers, even by voice message.
“I like to say that WhatsApp is the operating system of the region, so it makes sense to build something on WhatsApp to make it super easy,” CEO Manuel Godoy told TechCrunch.
WhatsApp itself already activated peer-to-peer transactions and the option for users to pay businesses via chat, but only within Brazil and India. But a broader mood wouldn’t be bad news for Félix and similar solutions like Send Offer, Jump Finance and Zapp — If users can use their card on WhatsApp, remittances will be just a click away, says Godoy.
Meta currently seems to view these third-party developments favorably. The WhatsApp for Business blog highlights the LAFISE Bank of Nicaragua use casewhich created a virtual assistant on WhatsApp to make transfers smoother.
But Felix Pango has a wider scope. Apart from WhatsApp, which they already have installed, “users don’t need to download any apps,” Godoy said. On the US side, users fill in most transaction details through the WhatsApp chatbot. Only in the final step do they have to click a link to securely fill in their debit card details. And on the other hand, the money can be collected instantly in local currency as a bank deposit, but also in cash at a store.
Cash is often what recipients prefer, so Félix Pago adapted to this reality and partnered to have cash pickup locations in Mexico, Guatemala and Honduras. For an additional $1.99, “the sender receives a receipt with a unique ID number and sends that receipt to the payee to show to the cashier to collect the cash.”
Much more happens behind the scenes, thanks to the internal and third-party tools that Félix uses to comply with its obligations and optimize its operations. There is KYC, AML and fraud prevention. and there is crypto, Godoy said.
With using Circle’s stablecoin USDC, Félix Pago is able to make savings in foreign exchange that it can pass on to users. The 24/7 availability of USDC also reduces Félix’s pre-funding needs, allowing him to make the first transaction free, as competitors Remitly and Western Union do. Félix then charges $2.50 on subsequent transactions in Guatemala and Mexico, while choosing tiered pricing for Honduras. Overall, this makes the fees much lower than SWIFT transactions, which are also slower.
“Crypto is a powerful tool for remittances, but you have to take it away from the user. The user doesn’t care about it. I always say it might be a donkey crossing the border, that’s okay. What they want is the money, the local currency, and they want it immediately at the best possible price. And crypto enables it on the back end.”
As Félix relies on USDC and crypto partners, Godoy believes the domain expertise of its new lead investor, a Boston-based crypto fund Castle Island Ventures, makes it a welcome addition to his cap table. “We already use some of their portfolio companies to make our infrastructure more robust and one of their partners, Nic Carter, is one of the leading experts at USDC [and] stablecoins, so I think that gives us a lot of leverage.”
Switch Venturesthe fund that drove Félix’s expansion round before seeding in 2023participated again, as did the investors who participated in the previous $2.5 million pre-seed round, including TwentyContour and MELI Capital, the venture capital arm of the Latin American e-commerce giant Mercado Librewhose collaboration with Félix gave the startup a significant boost.
As part of this partnership, Mercado is promoting Félix Pago to users of the Mercado Pago payment platform in Mexico. These referrals accounted for 25% of its new users at the time.
Similar cooperation with neobank Nubank followed, giving Félix’s growth another blow. “The nice thing though, is that today we’re still growing about 30% month-on-month, but it’s not just because of these partnerships,” Godoy said.
Referrals are its main growth engine, but the company also relies on influencer marketing and Facebook to get more exposure to its target audience in the U.S. So far, most of its users there are Latino professionals working in the construction, food and home Services.
This makes Godoy confident that Félix will remain complementary to Nubank and Mercado Libre even as the latter expands its fintech plans. (Refers looking for a banking license in Mexico.) “They don’t have a product in the US, so after all the sender is a customer of Félix Pago.”
Félix Pago also hopes to help these customers with more than remittances. “The vision we have for Félix is to become the trusted partner for the Latino immigrant in the US” His roadmap includes a credit builder and eventually real credit.
First, however, the startup will use its new funding to expand to El Salvador and Nicaragua, followed by the Dominican Republic and Colombia, and then the rest of Latin America. This is necessary if Félix wants to move further on its roadmap and have an advantage over other companies targeting the same niche.
“To be that trusted partner of Latinos in the U.S., we need to solve the [remittances] problem for all Latinos,” Godoy said.
