Citi buys stake in Peruvian foreign exchange fintech

CITIGROUP has acquired a stake in Peruvian foreign exchange startup Rextie, its first fintech investment in Latin America.

Terms of the deal were not disclosed, but Citi and Rextie executives said the bank is injecting cash into the company to finance its growth. Rextie, founded in 2016, has so far closed US$4.5 billion in forex transactions, and expects the figure to reach US$7 billion by the end of next year.

Rextie provides forex transactions through digital channels to 12,000 mid-sized and small companies in Peru and 170,000 individuals. The company also provides factoring and payment processing to companies.

Aldo Alvarez, head of Institutional Strategic and Fintech Investments for Latin America at Citi, said the deal creates opportunities to offer the bank’s products to Rextie clients.

The deal comes as the funding of Latin American startups sharply dropped this year. In the first quarter, it was a 54 per cent drop from the same period last year, said CB Insights, and volume was the lowest in three years.

The startup has not been burning cash to grow, its CEO and co-founder Mateu Batle said, adding: “We turned to profit after a year and a half.” REUTERS