Nexu's Innovative Financing Solution: A Game Changer in Mexico's Auto Industry

Published 4 months ago
  Nexu

Mexican fintech startup Nexu has developed a platform that streamlines the car purchasing process, allowing buyers to instantly request and receive a decision concerning vehicle financing. The company directly collaborates with dealerships to offer financing at the point of sale, thereby increasing conversion rates and expanding access to previously marginalized buyers.

A Closer Look at the Mexican Market

Contrary to the U.S. market, where financing accounts for 80% of new car sales and 40% of used car sales, securing vehicle financing in Mexico is a complex process. Less than 60% of new cars and a mere 2% of used cars are financed. This lack of financing options can be attributed in part to low approval rates from traditional banks and an outdated application process.

Abdon Nacif, co-CEO of Nexu, points out that, “When you apply for financing at a dealership in Mexico, you have to wait on average three days to get a response.”

Nexu’s Solution: Transforming the Financing Landscape

Nexu, with its proprietary risk algorithm, claims to be able to approve more than twice as many buyers as traditional banks. “We have created our own credit score based on public and private data,” states Fernando Gómez Arriola, co-CEO of Nexu.

In addition to its Series B funding, Nexu has also secured a loan from HSBC, although the amount has not been revealed. The company has already raised a total of $53 million in previous financing rounds. Other investors include Fintech Collective, Endeavor Catalyst, Altos Ventures, among others.

Nexu’s move could significantly alter the vehicle financing landscape in Mexico, challenging traditional banks and digitizing a sector in dire need of innovation.