How to Raise $1.2m in Funding (Mesfix Case)


How to Raise $1.2m in Funding (Mesfix Case)

Roxane Régnier

OCTOBER 26, 2017

As Mesfix raised its latest round of $1.2million, Seedstars wanted to get back in touch with Felipe Tascon, co-founder and CEO of Mesfix, and get the inside scoop!Seedstars: Hi Felipe! Could you describe in a few lines Mesfix’s service and how it impacts the emerging markets?Felipe Tascon: In Colombia, most micro, small and medium companies (SMEs) sell their goods and services and get paid 30, 60 or even 180 days later. In the meantime, they struggle to find the cash flow and working capital needed, limiting their growth and their payment capacity. Over 70% of SMEs don’t have access to financial products and 95% of the companies in the country are SMEs. This necessity gave birth to Mesfix, an online crowd-factoring marketplace which combines crowdfunding as an investment solution and factoring as a perfect financing option for SME.S: Could you quickly explain your business model for our readers?FT: Mesfix enables financial empowerment for SMEs and fosters social transformation leveraging the economy’s growth by boosting and supporting SMEs. Additionally, it simplifies paperwork, long lines and bureaucracy when all finance and accountability tasks are done online.We connect two principles:

  • Factoring: a company sells a receivable payable in 120 days of $100K for $95K so it receives cash right away to keep running the business and accelerating its sales with fresh new working capital. The investors wait 120 days collecting 100K USD at the end with a great return and from small amounts.
  • Crowdfunding: it’s easier to find $95K worth of investment through 95 people investing $1K, than with only 1 person investing $95K allowing diversification of risk from the investors.

The sale is done through a bidding system, which is closed once the invoice is fully funded/sold to the lowest rates bidder. The SME receives a cash advance after closing the bidding, and the entire process takes less than 72 hours on average.Here is a graphic of our revenue model:

Revenue Model

S: As a relevant stakeholder of Colombia’s entrepreneurial ecosystem, what is your opinion of it?

FT: I think it’s starting to thrive and it’s finally growing at a faster rate. Now we see more relevant startups and close interesting rounds of investments. Primarily, fintech is starting to boom. The venture capitalists and the investors start to bring the money to Colombia, so it is giving a great boost to the ecosystem.

S: Congratulations for your recent $1.2million round! What are your plans regarding that fundraising, and do you think participating in Seedstars World Competition helped?

FT: The plan for our recent fundraising is mainly for growth and product. So basically around 60% is going to be allocated in commercial activities and staff. Marketing will be around 20% to engage the awareness and to explain how the product works. The rest of it will be for improving the product, UX and working on all the frictions and pain points we want to take away from our customer base to improve acquisition and retention.

I think participating in Seedstars World Competition is a stamp of trust. Plus, being able to participate in this type of worldwide competition was a great opportunity to have a sense of what we are doing and feel the impact we are actually making.

Mesfix Team

S: How do you see the future of Mesfix and what objectives do you have for the next few years?

FT: The objective is to consolidate the product until 2018, meanwhile expanding in Colombia. We want to consolidate the acquisition channels and strategy, and the growth by enhancing our product. Our staff works really hard on consolidating the product. We want to reduce paperwork for our customers used for KYC, AML, etc: we expect to eliminate it in no more than 6 months by automating external sources of information. After that, hopefully, in less than a year and a half, we will start to implement the scoring that we are currently developing to improve acquisition. We want to offer a KYC, AML and risk assessment in less than 3 minutes for the MSME´s. This is our main objective: to take the product to another level and to establish Mesfix as a real fintech stakeholder in Colombia. Only then we will think about internationalisation. Mexico will probably be our next target market.

S: Any more news to announce?

FT: We will expand soon in other cities and deploy the service to people who need it most, in all regions. We are currently scaling our sales force to several cities in Colombia to make every enrolment and transaction easier and faster.

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