FILE PHOTO: The Citigroup Inc (Citi) in Toronto, Ontario, Canada October 19, 2017. Picture taken October 19, 2017. REUTERS/Chris Helgren/File Photo
NEW YORK (Reuters) - 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 closed so far $4.5 billion in forex transactions and expects to reach $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 LATAM 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. The first quarter saw a 54% drop from the same period last year, according to 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 have turned to profit after one year and a half."
(Reporting by Tatiana Bautzer; editing by Miral Fahmy)
