Kalto
Simplifying B2B payments for SMBs
The B2B payments space is rapidly evolving as businesses increasingly shift towards digital financial solutions.
Notably, in Mexico, a significant portion of SMBs, which account for 52% of the country’s GDP and 72% of its employment, still need to rely on outdated payment and financial processes.
Let's dive in.
Imagine this
You have a successful business, but its financial management is stuck in the past, relying on Excel, WhatsApp, and paper records.
As your business scales, your outdated financial systems can't keep up, leading to inefficiencies that slow growth.
Manual errors, overlooked payments, and sluggish receivables are more than just headaches; they harm your cash flow and overall business performance.
The burden of executing over 50 manual banking transactions adds another layer of complexity and potential for error.
With Kalto, you can simplify payments and take control of your company’s financial operation.
Explain it like I'm five
Kalto is a platform that simplifies B2B financial management and payment processes.
Accounts Payable: They help organize, schedule, and make bulk payments to suppliers.
Accounts Receivable: Businesses can issue invoices, manage receivables, and automatically reconcile collections. Automate reminders to customers and provide them with a white-label client portal to make the payment.
Credit: With a revolving credit line, Kalto enables customers to advance their receivables or delay their payables in seconds to maximize their cash flow.
Founders aim to keep small businesses in business by offering financial solutions that empower them to prosper and grow.
The ABCs
Industries: Fintech
Headquarters: Mexico City, Mexico
Year Operations Started: 2022
Team Size: 19
Raised: $5M USD
Accelerator/Investors: Undisclosed
Business Model: Subscription and transaction-based
Other players:
Background check
What we like:
Financial Management: Kalto provides a platform that allows businesses to control their finances and optimize cash flow effectively.
Analytics: Users can access all invoices and view their payment due dates, send automated reminders to clients regarding their invoices, and provide a payment portal for their clients.
Automation: Businesses can efficiently program, approve, and execute payments in bulk directly within Kalto's platform, eliminating the need for manual, one-by-one transactions or spreadsheets as management software.
Efficiency: Founders claim to reduce human errors by 75% and management time by 30% while increasing available cash flow and customer satisfaction.
Road Blocks:
Crowded: The B2B payments sector in Latin America is competitive, with numerous startups and established companies fighting for market share. Kalto is not the first to try innovating B2B payments in Mexico. A similar business, which raised around USD $20M, has stopped operating in the country. This shows how tough and tricky the market can be.
Economic Swings: Given that they offer revolving credit lines, the company is exposed to the risk of economic downturns. In unstable economic conditions, businesses may struggle to repay credit, leading to increased default rates and financial strain on their business.
Adoption: For them to succeed, it's not enough to attract new clients; the platform must also keep them coming back. The value offered by Kalto needs to outshine competitors to ensure high transaction volumes and customer loyalty.
Market: Kalto's primary target clients are SMBs with annual sales exceeding MXN $8,000,000 and making more than 20 weekly payments. SMBs with smaller payment volumes do not require Kalto's services. Identifying the appropriate businesses that can benefit from their platform can take time and effort.
The Architects
Dan Pinchasi, Co-Founder & CEO. Northwestern MBA. Previously @ TPY Capital.
Joel Liurner, Co-Founder & CPO. Previously @ D-local.
Request intro with founders by sending an email to gabriel@readrunway.com
Headlines Corner
Kapital, a Mexican fintech startup, invested around US $50M in the acquisition of Autofin. (Forbes)
Nagro, a Brazilian agro-fintech startup, secured US $49 million in funding. (Crunchbase)
Attom Capital debuts to offer financial liquidity for venture capital-supported startups in Latin America. (LatamList)
Allie Systems, a Mexican B2B AI-based workflow automation startup, was selected as one of the 20 most promising in the world in Tech Crunch Disrupt 2023. (Contxto)
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I've advised small and medium-sized businesses for years and seen their struggles with managing money and managing the business in general. These challenges can really slow down a business. So far, I haven't found a practical and affordable system for them in Mexico or anywhere else. Maybe this is the one.
This market is hard. The transactional component of B2B payments in MX is so cheap and agile with SPEI and STP that the value proposition of this type of solutions ends up being weak. Also, credit can be negotiated with better terms without bundling it with software.