SMEs Yet to Get Acknowledged As major Opportunity for Financial Services

Tribal focuses on the small and medium-sized firms which are a great possibility for financial services

FREMONT CA: Tribal, based in San Francisco, CA, is a financial services company that focuses on small and medium-sized firms (SMEs) in emerging markets. Tribal expanded its position in the country with products ranging from a corporate card to a spending control platform and a rewards program after financing $34.3 million in a Series A in April 2021. They began operations in Colombia, Chile, and Peru at the end of last year. Since then, BECO Capital, Global Ventures, and Endeavor Catalyst have all invested in the company. Tribal announced the purchase of a unique venture debt: US$40 million in a hybrid manner, including $20 million in fiat money and $20 million in USDC, a stablecoin cryptocurrency. Subsequently, the company has already raised $83.4 million in funds.

Stellar Development Foundation (SDF) and venture debt financing firm Partners for Growth financed the hybrid debt (PFG). This following survey focused on the market opportunities that Tribal saw in Latin America. They emphasized small and medium-sized businesses, analyzing the potential in this category, which has been overlooked in all markets for many years. According to the survey, there are 62 million SMEs that interact with Latin America on a worldwide scale every year. The market opportunity is $175 billion with Brazil and Mexico being the most crucial.

With the arrival of Tribal in the Mexican market which covered Colombia, Chile, and Peru last November, they have seen 50 percent growth since 2021, the biggest growth in Mexico. Tribal started providing services to companies with venture capital funding. When they went to traditional banks, they were not granted a product, despite the fact that they had raised various rounds of funding. This was due to the fact that they were just starting out as a business and did not match the financial standards.

Tribal venture debt is one of the first to be purchased in a hybrid manner; usually, venture debt is purchased exclusively in fiat or stablecoins. However, this is a unit of their overall strategic plan. Meanwhile, this hybrid round helps us to continue extending the products, which include financing and payment services for SMEs throughout Latam. On the other hand, it makes international transactions much more convenient as it takes less than five seconds when compared to traditional transfers which can take 24to 32 hours.