Covalto

About Covalto

Covalto, formerly known as Credijusto, operates as a digital banking and services platform targeting small and medium-sized enterprises (SMEs) in Mexico. Founded in 2015 by Allan Apoj Pascal and David Poritz, the company was established to address the significant financing gap for SMEs, which constitute a major part of Mexico's economy but have historically been underserved by traditional banks. The founders, who met at Brown University, combined Poritz's background in Latin American studies and social enterprise with Apoj's private equity experience and Mexican roots to build the company. They identified an opportunity to apply the successful fintech lending models from the U.S. and Europe to the untapped Mexican market.

Covalto's business model is centered on leveraging technology to provide a comprehensive suite of financial products. The company utilizes proprietary software and data science, analyzing digital tax filings, e-invoices, and other financial data to underwrite and service loans with greater speed and efficiency than incumbent banks. This technology-first approach enables Covalto to offer a multi-product ecosystem that includes business loans, equipment leasing, factoring to convert accounts receivable into immediate capital, and trust services. Revenue is generated from interest on loans and fees for its various financial services.

A pivotal moment in the company's history occurred in June 2021, when it acquired Banco Finterra, becoming the first Mexican fintech to purchase a regulated bank. This strategic acquisition provided Covalto with a banking charter, which significantly lowered its cost of capital, allowed it to take deposits, and provided direct access to Mexico's interbank payment system. The move doubled the size of the business and accelerated its growth, positioning it as a key neobank for SMEs in Latin America. In 2022, the company rebranded from Credijusto to Covalto and announced plans to list on the Nasdaq via a SPAC merger with LIV Capital Acquisition Corp. II, marking another first for a Mexican fintech.

The platform serves thousands of SME clients across Mexico, including those in the agricultural sector, which was a specialty of the acquired Banco Finterra. Covalto's services are designed to be an all-in-one solution, supporting businesses throughout their lifecycle with products that are competitive in pricing and delivery speed. By integrating banking, credit, and business analytics tools, the company aims to unlock the potential of Mexican SMEs that have been insufficiently integrated into the digital economy by traditional financial institutions.