Rewriting the History of Banking — Stefan Möller, Co-Founder & CEO of Klar
In this episode, Miguel Armaza interviews Stefan Möller, Co-Founder and CEO of Klar, a Mexican challenger bank working to democratize debit and credit in Mexico. Klar is making credit accessible to all Mexicans, including those with no credit history. It helps people build credit by looking at how and where they spend their money, without having to rely on obsolete and traditional credit scores.
Klar’s business has experienced rapid growth having issued over 25,000 credit lines amongst its 200,000 customers in less than 12 months and their growth has tripled during the pandemic.
Klar has raised almost $73 million in debt and equity from some of the most prestigious funds in the industry, including Naspers’ Prosus Ventures, the World Bank’s IFC, Quona, Mouro Capital, aCrew, FJ Labs, and Gilgamesh Ventures*.
Stefan describes the first leg of his career as rudimentary entrepreneurship. Growing up in Mexico City, he still remembers running multiple kiosks and clothing stores in the city’s center and working in the hustle and bustle of the retail world. The business was no unicorn, but Stefan managed to grow his operation to around 100 employees with unquestionable success. After five years, he moved on from this venture and decided to get his MBA at IESE in Barcelona. He joined Bain & Company upon graduation and later landed a role at Nova Founders Capital, an operationally-driven VC that allowed Stefan the opportunity to learn the investing side of the business, while still getting his hands dirty in the operations of portfolio companies around the world.
Modernizing and Industry
Throughout his time as a management consultant, Mr. Moller worked on projects for many of the big banks and realized some of their internal processes were quite archaic. What bothered him the most was that he could not really see a big “Why” as to why these processes looked the way they did. At the same time, he realized banking was one of the few Mexican industries that had not been disrupted by technology and there was a massive opportunity for newcomers to build a software business to disrupt the country’s financial ecosystem. So he decided to do something about it.
A World-Class Team
For Stefan, flawless execution comes down to great people and he has recruited a highly diverse and talented group spanning 15 nationalities. From the onset, he set out to assemble an exceptional team in Mexico that would deliver stellar operational results. At the same time, he also decided to build and recruit Klar’s engineering team out of Berlin. Recognizing it as one of the top engineering hubs around the world, Berlin presented an opportunity to create an “engineering wonderland” where Klar can scale and recruit highly talented team members with relevant banking and fintech experience, without ever lowering the bar for talent. In his own words “Berlin is the brain of the company, in many ways, because that’s where the assets are being built. And we operate those assets from Mexico.”
From day one, the Klar team also realized they would have to build many of the systems in-house. Not only because the infrastructure did not really exist, but also because it would give them additional flexibility. Establishing the fundamental components before launching a product took time, but it allowed them to build flexible systems in line with Mexican regulation. Better said, “life is a bit more painful down here [Mexico], but at the same time, it also raises the barriers for entry. Because once you’ve built those, you have option value to those assets.”
Rather than offering a one-size-fits-all approach like incumbents, they focused on accommodating multiple layers tailored to different user needs. Not only was this possible thanks to their technology, but in fact, Mexican banking regulation was built to offer this kind of flexibility.
The Road Ahead
Klar might be a young company, but over the last 12 months, they have moved extremely fast and captured over 200k clients. The effects of COVID have fueled their exponential growth but the crisis has also led them to adjust the product to meet the needs of their users. By keeping a very open line of communications with clients, Klar has worked with them to tailor areas like credit collections and the consolidated impact of non-performing loans on their portfolio has been marginal.
Armed with a $15 million fresh round of funding, Klar plans to continue growing its operations and engineering capabilities in Berlin and Mexico in order to expand the company’s product suite to help users manage liquidity needs.
Stefan Möller
Stefan Möller is the Co-Founder and CEO of Klar, a Mexican challenger bank working to democratize debit and credit in Mexico. Before starting Klar, Stefan was a Venture Director at Nova Founders Capital, a global fintech investment company where he learned first hand the challenges faced by consumers seeking access to decent financial services. Before Nova Founders, Stefan worked as a consultant at Bain and Company where he developed a deep understanding of the limitations faced by financial institutions in their path to digital transformation. Prior to that, Stefan developed several entrepreneurial ventures in Mexico and Germany. Stefan has an MBA from IESE Business School in Barcelona, and a BA in Economics from the Goethe Institut in Frankfurt and studies in Yale university.
Klar
Klar is working to democratize financial services in Mexico since 2019 by offering a 100% digital, transparent, free and secure alternative to traditional credit and debit services. Unlike traditional financial institutions, Klar provides consumers with a unique set of features and benefits.
* Miguel Armaza is a Co-Founder of Gilgamesh Ventures and a proud supporter of Klar.
