In Mexico, 33% of the population lives on less than US$5per day. 53% of the rural population and 36% of the urbanpopulation has less than a 7th grade education. 44% of thepopulation lives under the poverty line. This is despiteMexico being ranked as one of the top 15 richest countriesin the world. These eye-opening figures help explain whyMexico is the third largest recipient of remittances. In 2021,more than US$50 billion of remittances was sent to Mexico,of which 95% came from the United States. These transferspartly went to support some of the most vulnerablecommunities, where 1.6 million Mexican households dependon remittances as their sole source of income. Without thisvital inflow of capital, mothers would not be able to feed their families, ambitious children would not be able to go toschool, and communities would not have access to certainfundamental rights such as the right to effective healthcare.
Traditionally, Mexicans living in the United States have hadfar too few options to send money across the US-Mexicanborder. This includes international solutions such asWestern Union and MoneyGram, as well as local playerssuch as Elektra and Coppel (some of the largest retailers inthe country). One thing that all these solutions have incommon is that they are generally unfriendly for the user: novisibility in exchange rates, exorbitant fees (+$50), slowtransfer processes, limited ability for digital transfers,inconvenient due to long in-person wait times, and low techimpacting the user experience.
This is where our investment in Félix comes in. We had beenspending some time studying the international remittancemarket in India, China, and the Philippines, and realized thatthere was a great deal of similarities between the markettrends which propelled several Asian startups to excel, andtrends that are present in Mexico. When we first met Bernardo Garcia and Manuel Godoy, co-founders of Félix,we were immediately impressed with their understanding ofwhat was broken in the current Mexican remittance marketand how thoughtful they were around how to build a betterproduct. The solution that Bernardo’s and Manuel’s teambuilt allows anyone from the US to send money to Mexicousing an easy-to-use WhatsApp chatbot for a flat US$2.99fee (at least 94% cheaper than competitors’ prices) withupfront knowledge of the exchange rate — something thatcompetitors do not allow. Within minutes of interacting withthe Félix WhatsApp chatbot, the sender is able to send up to$1,000 directly to the bank account of someone living inMexico or allow them to pick up at one of several partneringbrick-and-mortar locations. For us, the value proposition ofFélix was and continues to be crystal clear: cheaper, fasterinternational money transfer with no hidden fees and nosurprises all in a superior customer interface.
At H20 Capital, we are proud to have invested in Félix’s pre-seed round alongside investors such as Wollef and GFC.Since our investment in late 2021 the company has exhibited strong product-led growth and has quickly begun to scale in their first “sender’s market” of California. We invested in Félix not only because of its ability to positively impact returns for our investors, but also because of the impact the business can have on millions of families across Mexico who depend on remittances to make it to the next day.
Please visit Félix’s website to learn more about the first ever chatbot native remittance company.