In 2020, analysts expected Clip to become the first unicorn in Mexico. However, three other companies got ahead of this payment processing fintech. Although it was not the first, investors continue to see great potential in this Mexican startup and this is reflected in the recent investment of Viking Global Investors together with Softbank, achieving the long-awaited valuation of one billion dollars.
Those who know the startup ecosystem in Mexico will not be surprised that Clip has achieved the title of “unicorn.” The surprise, actually, is that it took so long. This startup, founded by Adolfo Babatz in 2012, has managed to become a disruptive company in the Mexican financial system, at the same time that it has managed to differentiate itself from its broad competition.
How to create a unicorn in Mexico
Clip is a case study for Mexican entrepreneurs. Instead of importing a successful business model and tropicalizing it, Clip began as a fintech focused on solving a specific problem in the Mexican market: low banking. The vast majority of businesses in Mexico do not accept card payments and this is due, in part, to the complicated process of acquiring a bank terminal.
Adolfo Babatz, who worked at Paypal after completing his graduate degree at the Massachusetts Institute of Technology (MIT), observed that in Mexico there were more people without a bank account than without a smartphone. Together with Vilash Poolava, Babatz designed a prototype to turn any smartphone into a banking terminal. Thus was born Clip.
Clip currently has 600 employees and offers three different devices for processing card payments. In this way, the startup allows businesses to increase their sales by 30% while offering payments in installments from any bank.
The investment that Clip received in June 2021 is another achievement in the career of its founder, who in 2017 had already been recognized as Entrepreneur of the Year by Endeavor, and as one of the 30 most successful entrepreneurs under 30 years old by the Mexican business magazine Expansion.
Clip: payment disruptor in Mexico
According to Babatz, 85% of his clients only received cash payments before adopting Clip. For the executive, this is proof that Clip is managing to democratize payments in Mexico.
The company sells its products mainly online, although it also has 15 thousand points of sale in the country and can make deliveries in less than 24 hours in Mexico. Clip currently has offices in Guadalajara, Salt Lake City and at the beginning of the year, the company opened an office in Argentina with the interest of accessing the country’s talent pool, a common strategy for tech companies focused on Latin America.
In this year, the Mexican startup began offering cash advances with an interest rate ranging from 10% to 15%, while it also has an online catalog so that suppliers can sell products on the Internet and receive payments for that. same medium.
Investments and future plans
Before the successful round of financing with which Clip achieved unicorn status, the company received investment from General Atlantic, Goldman Sachs., Ribbit Capital, Alta Ventures, Dalus Capital, American Express Ventures and Grupo Financiero Banorte.
The IPO is within Clip’s plans, but before that, they expect to grow more to achieve favorable conditions in the equity market, according to Babatz for El Financiero.