Kaszek, Andreessen back Argentina fintech Tapi in US$22-million round

Argentine financial technology startup Tapi raised US$22 million in venture funding in a Series A round led by Kaszek as the company expands its operations in Mexico, co-founder and Chief Executive Officer Tomas Mindlin said.

Tapi serves as a processor for payments on large Latin American consumer platforms such as Mercado Pago and cryptocurrency exchange Lemon. The company expects to process around US$400 million in payments this year across the five countries in which it operates, quadruple its activity in 2023. Tapi lets fintech companies process recurring payments, such as monthly bills.

The fresh funding follows the initial US$9 million Tapi secured in 2022 in a seed round led by Andreessen Horowitz, which participated again this time. Mindlin said in an interview Thursday at Bloomberg’s office in Buenos Aires that he expects Mexico — where fintech competition is heating up this year despite a cash-heavy economy — to be Tapi’s fastest-growing market over the next two years.

“We’re going to be working with the fintechs that are going to grow the most, continue to do the most financial inclusion and transform cash to digital payments, so Mexico is very important for us,” Mindlin said. “I’d say in a year from now we’ll have 80 percent of the banked population in Mexico working with our infrastructure.”

Mindlin declined to comment on Tapi’s valuation. The company has about 70 employees, mostly based in Argentina. Total payment volume is expected to grow fivefold by the end of the year to 10 million transactions a month, the CEO said.

The company’s name stems from Mindlin’s first startup project, a digital wallet called TAP, and the technology supporting the current system known as API, or application programming interface.

Tapi’s payment processing technology is designed to help fintechs serve customers across several countries, each with its own banking system and regulations. There were more than 3,000 fintech firms in Latin America at the end of 2023, more than triple the number in 2017, the Inter-American Development Bank reported last month.

Venture capital dealmaking in Latin America is at its slowest pace since 2018 even as deals have climbed globally. In the first six months of the year, there were 323 deals valued at US$2 billion in Latin America, according to PitchBook data released last week. The downturn stems in part from a pullback from US investors, as well as a lull after a spike in deals a couple of years ago.

Mindlin is the son of Marcelo Mindlin, chairman of Pampa Energía SA, and worked at his father’s company earlier in his career.

“Operating with risks and getting used to taking risks from an early stage is something that he instilled in me, and I’m happy to have done it,” Mindlin said of his father.