Dealflow | January 18, 2022

Elevar backs Fairplay’s revenue-based financing for online businesses in Mexico

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, January 18 – Fintech startup Fairplay provides revenue-based working capital loans and inventory financing to Mexico’s small and mid-sized online businesses. The Mexico City-based company launched in 2019 to plug the small-business financing gap in Latin American e-commerce. The pandemic has super-charged businesses’ digital transformation.

“There is a huge market opportunity in Mexico and Latin America for fintech focused on the performance of the end beneficiary,” said Lina Peña of Elevar Equity, which backed Fairplay’s $35 million Series A raise. Dila Capital and Kayyak Ventures led the $15 million equity portion. Architect Capital led the $20 million in debt financing.

Business-friendly fintech

Fairplay provides quick online loans to businesses for digital marketing, inventory and logistics costs. The company charges a flat fee and takes a cut of earnings, on flexible terms, until the loans are repaid. More than 90% of Fairplay’s customers have 15 to 50 employees.

“We’re seeing many closures of small businesses that have not been able to survive the past two years,” Peña told ImpactAlpha. Fairplay, she said, is “easing the shift to the digital economy in a systematic manner.”

Fintech companies accounted for more than half of the $20 billion in venture capital invested in Latin America last year. Elevar has largely sat out the fintech boom, in part over concerns about predatory pricing.

“Very few business models are taking into account the actual needs of businesses like Fairplay,” Peña said.