Jeeves arrives in Brazil with flexible loans for startups without access to capital

RIO DE JANEIRO, BRAZIL – The unicorn business expense management startup aims to fill the funding gap left by traditional banking and venture capital, especially in times of market downturn.

Jeeves, a business card and expense management startup, officially arrives in Brazil to offer flexible loans for startups and small and medium-sized enterprises (SMEs) without access to capital in an environment where venture capital may be pulling back on its investments.

In March, Jeeves raised its Series C round, which turned it into a unicorn worth US$2.1 billion, capital that allowed it to expand into Brazil and add to the list of countries where it has a presence: Mexico, Colombia, Chile, Peru, and Canada.

Jeeves’ intention is for Brazilian SMEs with revenues above R$1.2 million (US$250,000) per year to finance their businesses, especially at a time when the venture capital market is trying to preserve cash and significantly reduce resource costs.

During the fintech event, FinnoSummit, Brian Siu, manager of Jeeves in Latin America, mentioned in an interview that they are trying to fill the gap left by venture capital.

This year they will no longer raise an equity round, but they will raise a debt round in the next quarter to continue growing.

“By raising more debt, we can expand the placement of credit products. The current line is US$100 million, and this is significantly larger,” he said.

Its arrival in Brazil at this time of high inflation has an impact because it causes central banks to raise their interest rates and makes the money they receive from their funders more expensive.

In the South American country, they will soon launch their card; for the moment, they entered the credit business, where they already have clients of those operating in Mexico and Colombia with a presence in Brazil, who are already using the services in the South American country.

HOW DOES THE FINTECH AND INVESTMENT LANDSCAPE LOOK?

Jeeves arrives in Brazil in an environment of crisis; Siu assured that markets are cyclical and that the fall comes after ten years of growth. “Admittedly, we are in the early stage of this cycle.”

Asked how the wave of layoffs has affected his core business, which is corporate cards, Siu said he has not yet seen a decrease in spending despite employee departures at some startups. In fact, in Mexico, the Hot Sale represented an uptick in card transaction activity.

On the outlook, Siu believes that “there is really going to end up being a correction in the market.”

“We believe that in the long term, at a global level, fintech is still practically at an early stage, but in the short term, the market sometimes has to correct itself, and I think that unfortunately, some players that have not managed to prove their business model, may end up exiting the market,” he added.

But he assured that at this juncture, they have extended credit lines for startups so that they can extend their operation for six or 18 months.

The world has changed in the last two months, and the market and Jeeves must adapt to the new reality.

In this adaptation process, Siu says they have had a lot of communication with their clients to inform them of the changes they have had to make to focus on making their operation more efficient now with the crisis.

“At Jeeves, we see the importance of creating a sustainable company from the beginning and not just thinking that I’m always going to raise money from venture capital,” he acknowledged. “Now the plan is to focus on the business we are building, maintaining healthy growth in the current market environment and improving operating and net margins.”

With information from Bloomberg

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