R2 Raises $15M to Promote Latam Small Business Lending

Mexico City-based lending platform R2 has raised $15 million in a Series A funding round.

The round, led by Wen-Wen Lam of Google’s venture fund Gradient Ventures, will allow R2 to conduct more hiring in the areas of engineering, product, data and risk, finance, compliance and partnerships, Co-Founders Roger Larach and Roger Teran said in a Friday (Sept. 2) blog post.

Founded in 2020, R2 makes a lending infrastructure that lets platforms offer capital to buyers and sellers in Latin America.

In the last year, the company said in the post it has “launched embedded lending partnerships with some of the region’s most iconic technology platforms, financed over 3,000 small businesses,” and grown monthly revenue 23-fold.

“We are just getting started — small businesses in Latin America still face a $1.2 trillion credit gap,” the founders wrote in the post. “As more businesses go online and transact digitally across the region, we are well positioned to leverage new data sources to further improve our underwriting capabilities.”

PYMNTS has written extensively this summer about the digital transformation happening in Latin America.

Read more: Latin America’s Digital Payments Explosion Demands New Infrastructure

“Regardless of how inflation moves, the demand for digital payments is growing at a record pace because it was so behind,” Kushki CEO Aron Schwarzkopf said in an interview with PYMNTS’ Karen Webster June.

Fueling the transition from cash to digital is smartphone penetration and access to the internet, both of which are high. As noted in PYMNTS’ research on the digital transformation of the region, almost three-quarters of the adult population in Brazil is connected to the internet, while 65% own a smartphone.

In one example of the changing digital payments landscape, Visa said cardholders in Latin America and the Caribbean upped their digital transactions by 55% in 2021. Overall, digital transaction values in the region exceed $100 billion and will be worth as much as $175 billion by 2025 alone.