Why We Invested: Aviva
Enhancing the credit offering experience, 'phygitally'
Historically, Mexico's traditional banking system has left those at the base of the pyramid (BoP) with either limited access to financial products or access to products of suboptimal quality. Currently, the most common formal credit product available for BoP clients is department store credit cards, servicing 62% of adults1, and creating a heavily limited financial market. The reliance on this type of product points to a larger issue of quality access to comprehensive banking services, which can be attributed to a range of barriers, like excessive documentation requirements or inadequate geographic coverage of bank branches. According to World Bank data, the number of bank branches per 100,000 adults has historically been twice as high in OECD countries than in Mexico. Traditional banking and fintech solutions have failed to meet the BoP customers’ needs, and thus the apparent necessity for an accessible, efficient, and empathetic solution in the market. To achieve this at the BoP, we don’t believe the short to medium-term solution will be fully digital. We believe it will be hybrid; a physical presence leveraged by technology and a digital offering. Aviva has proved to us that they could address this fundamental pain point through a “phygital” (Physical and Digital) model. After spending 18 months monitoring their traction and keeping in touch, Aviva achieved every milestone previously proposed. In addition to their exceptional traction, unit economics, and low default rate, their progress led by a team of seasoned founders gave us a clear sight of Aviva’s potential and confidence in our conviction to invest.
Founded in 2022, Aviva emerges as an innovative fintech solution targeting the C and D socio-economic segments across 600+ small to medium-sized towns in Mexico2. In a country where cash still represents 91% of all small transactions3, Aviva seamlessly blends its customers’ preferences for human interactions and cash transactions with cutting-edge technology, leveraging real-time video interactions and AI. By including human interaction in a credit transaction, the customer’s willingness to pay is increased compared to a fully digital exchange.
The Company offers personal, micro-business, and home improvement loans ranging from MX$2,000 to MX$20,000 through a seamless and simple process that consists of an initial 10-minute video call at the company’s kiosks. Aviva is then able to quickly approve the loan, by measuring risk through biometric data and computer vision.
Aviva aims to serve underbanked customers in Latin America, starting with Mexico, by using face-to-face interactions to build trust and help clients make smart financial decisions. This represents a big opportunity in the market with a potential US$15.6 billion consumer credit portfolio driven by Mexico's 55 million underbanked individuals4. According to iProspect, the business opportunity grows to US$34 billion when targeting the underbanked population in Latin America which is comprised of 220 million adults.5
Aviva’s success can be attributed to co-founders Filiberto Castro, David Hernandez, Amran Frey, and Israel García. Their extensive knowledge of financial services, risk management, and technology developed in 55+ years of combined experience, delivers a fully seasoned team with the necessary foundations to scale the business. Their personal experience and deep understanding of the market’s needs have led them to turn Aviva into a first in its class fully scalable and functional solution.
Aviva’s revolutionary phygital business model can enhance credit offerings to underbanked communities in Latin America at competitive interest rates. The Company’s mission aligns seamlessly with IGNIA’s thesis of supporting companies tackling Latin America’s fundamental pain points through digitalization and technology. We share the founding team’s vision and trust that through their experience and motivation, they will guide the company to become a leading financial product that is useful to millions of people.
We are excited to partner with Aviva on their journey with our investment in their most recent Seed round. Their unique approach and understanding of the market, position them as a leader in the microlending space. We have co-invested alongside top-tier funds Wollef, 500 Global, Magna, DCG, Carao Ventures, Krealo Credicorp, and Newtopia, all of whom are complementary based on their extensive knowledge of the Fintech space, fundamental to the Company’s strategic development.
Congratulations to Filiberto, David, Amran, Israel, and Aviva’s team on closing this funding round.
Tarjetas departamentales, la otra cara del crédito – PROFECO (2019)
Bases de Datos de Inclusión Financiera – CNBV (2021)
Predomina el uso de efectivo como medio de pago en el país – El Financiero (2022)
Portafolio de información – CNBV (2023)
Study: LatAm's unbanked offer $34B opportunity for financial service providers – S&P Global (2019)