Why we invested in Félix, the first chatbot native remittance company

In Mexico, 33% of the population lives on less than US$5 per day. 53% of the rural population and 36% of the urban population has less than a 7th grade education. 44% of the population lives under the poverty line. This is despite Mexico being ranked as one of the top 15 richest countries in the world. These eye-opening figures help explain why Mexico 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 transfers partly went to support some of the most vulnerable communities, where 1.6 million Mexican households depend on remittances as their sole source of income. Without this vital inflow of capital, mothers would not be able to feed their families, ambitious children would not be able to go to school, and communities would not have access to certain fundamental rights such as the right to effective healthcare.

Traditionally, Mexicans living in the United States have had far too few options to send money across the US-Mexican border. This includes international solutions such as Western Union and MoneyGram, as well as local players such as Elektra and Coppel (some of the largest retailers in the country). One thing that all these solutions have in common is that they are generally unfriendly for the user: no visibility in exchange rates, exorbitant fees (+$50), slow transfer processes, limited ability for digital transfers, inconvenient due to long in-person wait times, and low tech impacting the user experience.

This is where our investment in Félix comes in. We had been spending some time studying the international remittance market in India, China, and the Philippines, and realized that there was a great deal of similarities between the market trends which propelled several Asian startups to excel, and trends 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 of what was broken in the current Mexican remittance market and how thoughtful they were around how to build a better product. The solution that Bernardo’s and Manuel’s team built allows anyone from the US to send money to Mexico using an easy-to-use WhatsApp chatbot for a flat US$2.99 fee (at least 94% cheaper than competitors’ prices) with upfront knowledge of the exchange rate --- something that competitors do not allow. Within minutes of interacting with the Félix WhatsApp chatbot, the sender is able to send up to $1,000 directly to the bank account of someone living in Mexico or allow them to pick up at one of several partnering brick-and-mortar locations. For us, the value proposition of Félix was and continues to be crystal clear: cheaper, faster international money transfer with no hidden fees and no surprises 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. ?