Interview with Founder of LinKedIP, Miguel Licero Gualdron Miguel Licero Gualdron, Founder of LinKedIp is…
Boris Batine founded ID Finance in Spain in 2015 alongside co-founder Alexander Dunaev with the aim of offering accessible and inclusive financial solutions across Europe and Americas. He has an extensive background in investment banking and has held top-management positions at top banking institutions in London, such as Deutsche Bank, Renaissance Capital and Royal Bank of Scotland. This interview follows two relevant equity and debt financial agreements with two renown institutional investors: UK based asset manager Kingsway Capital and US asset manager SR Alternative Credit, an affiliate of Spouting Rock Asset Management.
ID Finance Interview:
Finnovating (F): What motivated ID Finance to seek external funding, and how will this funding support the company’s growth and expansion plans.
Boris Batine (BB): As a profitable company, we have managed to fund our growth with our own resources for quite a long period. We have become top alternative lender in Spain and Mexico with over 5m registered users. Having achieved a strong market position, we are now ready to scale the operations even further. This accelerated growth is the primary reason for raising additional external funding. With Kingsway and SR Alternative Credit, we believe we find ourselves in an excellent position to fully exploit the potential of our innovative financial products by seeking external funding.
Welcoming two renown institutional investors such as UK asset manager Kingsgway Capital and US asset manager SR Alternative Credit (an affiliate of Spouting Rock Asset Management, LLC.) is, without doubt a turning point for the company. It will surely help us to consolidate in Spain and Mexico and further expand our presence both in Southern Europe and Latin America. And we are very excited about the prospects for the Group.
(F): How did you get in touch with Kingsway Capital for the funding?
(BB): We actually have an excellent and very experienced team of professionals working in Investor Relations coupled with our own network. This gives us strong connections within the financial world. We are in a constant dialogue with a large number of professional investors in UK, Europe and US.
Both Kingsway and SR Alternative credit are active investors in our space and our visions align very well with those investors and we also have a very aligned vision of ID Finance future with them.
(F): What is the significance of the €30 million funding received by ID Finance from Kingsway Capital?
(BB): So far, this is the biggest equity round carried out by ID Finance, also the biggest carried out by a Spanish Fintech in the first quarter of this year, and having a new institutional investor on board opens a new horizon for our company.
With this additional equity we are in a very strong position to grow our financial wellness app, Plazo across Europe and Latin America. This will take ID Finance to the next level in terms of company size and the product offering to our clients.
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(F): What are the plans of ID Finance with the fresh investment, particularly with regards to the roll-out of its financial wellness app Plazo?
(BB): The capital is being invested into the organic growth of the business with a strong focus on the roll out of Plazo, the company’s flagship financial wellness app, both in Spain and Mexico. In Spain we have already reached 130,000 active customers and we expect to keep increasing this number as we keep launching new product features. One of the most demanded products by our customers is credit, which we launched a couple of months ago, leveraging on our solid track record as lending experts.
We are still making adjustments to finetune and personalize the credit offering on our Plazo app and keep improving the customer experience. We have seen the credit line demand gain traction with already close to 5,000 credit lines issued. In addition, Plazo customers now have a unique individual IBAN, which offers them a full range of new financial experiences. For example, they now can directly have their salary deposited on their Plazo account. We are also working on expanding our cashback program adding new brands to keep rewarding our customers for their daily transactions. Over 17.000 Plazo users are already benefitting from our cashback program.
(F): How does ID Finance plan to capture significant market share and drive financial inclusion across Europe and Latin America?
(BB): Our value proposition for Spain aims at improving people’s financial wellness and stability by offering a wide range of seamless transactional, saving and credit solutions for their daily needs, without charging unnecessary fees and always keeping an eye on helping users save money and providing credit solutions for specific liquidity needs. Additional features of our Plazo app in Spain, like the one helping customers to get extra income or find a better job are meant to add value and are fully aligned with our mission of providing financial wellness.
Regarding Latin America, we have been operating in Mexico for quite some time and have gained significant market share with our lending platform MoneyMan. Now we are piloting Plazo in this market, where we see a great potential to keep increasing our presence. The approach of Plazo for Mexico is working towards financial inclusion by offering an attractive fintech credit card as a more accessible way of financing and as a mean to build Credit History and offer, at the same time all benefits of a banking credit card, such as higher limits and access to monthly instalments without interest, promotions, bonuses etc.
Once consolidated in both markets, we believe we have a fantastic opportunity to keep scaling Plazo and expand to other markets both in Southern Europe and Latin America.
(F): What are the growth prospects for ID Finance, given its recent funding and expansion plans?
(BB): Our expectation is to grow significantly until 2025, by increasing our total net portfolio both in Spain and Mexico to around €1.2 billion. This should also help us boost our current revenue and income levels. Regarding our financial wellness app Plazo, we expect to grow our active customer base to over 870.000 clients.
(F): How has the Spanish government played a role in approving the funding for ID Finance?
(BB): The investment inflow into our company is considered by Spanish authorities a strategic transaction. Therefore, we had to submit to a long administrative and legal process for approval. After several months, we finally got a favourable review from the External Investment Board and afterwards the transaction was officially endorsed by the Spanish Council of Ministers.
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(F): Can you discuss your appointment as CEO of Plazo, and what this means for the roll-out of the app?
(BB): Given the strategic importance of Plazo for the company, as co-founder of ID Finance, it makes all the sense for me to assume a leading role in Plazo and work alongside our talented team to keep growing Plazo.
(F): What are the key terms and conditions of the financing agreement that ID Finance has closed with the US institutional investor for its business in Mexico? Can you provide some details regarding the funding amount, repayment terms, and any other relevant aspects of the agreement?
(BB): ID Finance has secured a $30 million senior secured revolving credit facility from SR Alternative Credit, an affiliate of Spouting Rock Asset Management, LLC. Regarding the terms, the financing transaction has been structured via a Master Collection Trust Fund set up in Mexico, with Actinver Bank S.A, Multiple Banking Institution, Financial Group Actinver, acting exclusively as an independent trustee of the irrevocable trust administration contract and payment source.
This structure enables ID Finance to efficiently operate cash flows, while ensuring a safe and convenient cash control tool for the investor. With the support of the new debt facility, the company is aiming to accelerate its growth further while strengthening its profitability as it scales under the leadership of Mexican Country Manager Leslie Sánchez.