After 1 12 months within the nation, Clara targets Brazil as the most important market in LA
THE clear, fintech Mexican unicorn of financial services and expense management for companies, completed its 1st year in the Brazilian market in December. In these 12 months, between expansion and containment movements in the face of the challenging economic scenario, the company is confident, and envisions big plans for the country.
“Today, Brazil already represents 30% of the clear in Latin America, and for 2023 we already estimate that it will have the biggest piece of the pie”, says Layon Costa, general manager of fintech in Brazil. Currently, the company’s home country, Mexico, still has the highest representation, with 60%, with the remaining 10% going to Colombia, another market in which the startup is present.
Despite having announced its entry into the Brazilian market in December 2021, clear it still used a good part of 2022 to “fine tune” its operation, investing in a team and platform to customize the solutions developed by the headquarters in Mexico. In fact, it was during this period that the company invested in the growth of the team, reaching 75 employees, an increase of 150%.
According to Layon, in terms of customers, in the first half the startup signed a contract with some early adopters, and actually went to the market from June. “Since then, we have grown at an exponential pace”, pointed out the general manager. According to the company, during the year the company issued 27,000 physical and virtual corporate credit cards in the country, and processed around 500,000 transactions, representing an amount of US$ 48 million.
According to the executive, the enterprise segment currently occupies 10% of the company’s clear in Brazil, with medium-sized companies and startups taking 60% to 70%. Smaller startups, but with a more technological focus in their management, complete the customer base.
In the manager’s view, the challenge and opportunity are in the enterprise segment, where it competes not only with other startups but also with Simple Account, but also with large ERP companies. Even so, Layon maintains confidence in the product, even more than the name acquired by clear in the startup scenario, which opens doors for more “tuned-in” founders.
“There is a niche that knows the clear, but there is a universe of companies that are not so connected in this world of startups. In this case, our attraction is not so much our name, but our solutions. In the end, what really needs to make growth happen is the quality of the solution,” says Layon.
According to him, one of the differentials to gain customers at the top of the pyramid is the release that clear got next to MasterCard to release cards directly, unlike other players that use BaaS operators such as Dock and the Zoop to deliver some of its financial layers. “It was a strategic decision, which increases our power to customize the platform with customers”, he explains.
Growth with parsimony
Despite the excitement with the growth during the first year in Brazil, the clear it had its share of complications during 2022. In the middle of the year, the company was forced to make a wave of layoffs in its staff. The company’s CEO, Gerry Colyer, even wrote a statement on his LinkedIn giving your reasons.
“The global macro situation has changed significantly more than was reasonably foreseeable six months ago, when we put our current investment plan into action. Therefore, in the last two months, we have been making adjustments to our operations and redefined our financial planning. Considering the human cost involved, the reduction of the team was the last adjustment we analyzed”, said Gerry, without disclosing information about the number of cuts.
The news comes less than six months after the company raised $70 million in a Series B round led by coat🇧🇷 It was the round that raised the company to the status of a unicorn, and at the time it coincided with fintech’s entry into the Brazilian market.
Speaking specifically of Brazil, the clear had already raised a round of US$ 30 million in May 2021 to put into action the plan for its Tupiniquim operation. Serie A was led by funds STD Global — investor of Nubank – and monashees🇧🇷 Kaszek, Avid Ventures and General Catalyst also followed in the round. Afterwards, she still got an addition of US$ 5 million, coming from names like Sebastian Mejia, founder of rappi🇧🇷 Ariel Lambrecht, co-founder of 99Daniel Vogel, cryptocurrency exchange Bitso🇧🇷 and Sergio Furio, founder of Credits🇧🇷
Even with reinforced cash, the Brazilian operation of clear found himself grappling with the need to insure expenses. According to Layon, after the initial hiring boom at the beginning of the year, the company “parked” its internal expansion. “Now we are gradually opening new vacancies, according to the need”, he points out.
To give its operations in Latin America a boost, fintech sought new capitalization in August, but in a different format: debt. The company raised US$ 150 million in financing with the Goldman Sachswith an eye on opportunities to unlock more credit and loans for its customers.