In a tight labor market, the best way to attract and retain talent is to look after employee well-being. As Mexico is nearing full employment, this creates tailwinds for these endeavors, but with particular awareness that financial, physical, and mental health are interconnected.
“The main problem to solve in Mexico is around financial matters,” said Mexico-based entrepreneur Nima Pourshasb (at the center in the picture above). His startup, Minu, helps Mexican employees provide their workforce with more than 50 benefits including telehealth, but also earned wage access so they don’t have to stress over waiting for payday.
With some 2,000 employers of all sizes as its clients, Minu’s platform has 1 million users, Pourshasb said. This helped Minu overcome declining interest from some generalist U.S. VCs to invest in Mexican startups; it just closed a $30 million Series B round of funding led by QED, with participation from new investors, including Endeavor Catalyst and Next Billion Capital Partners.
“When we look at the investors that joined this round, many of them are impact investors […] I think what they’re seeing is the impact that we’re having in terms of reducing financial stress, and in terms of changing behaviors,” the Iranian CEO told TechCrunch, referring to the startup’s use of gamification to incentivize savings and better financial hygiene.
Reducing financial stress was the starting point of Minu, which Pourshasb co-founded in 2019 with Rafael Niell, a Spaniard, and Paolo Rizzi, an Italian. All three call Mexico home, and “became obsessed with the problem of the lack of financial wellness in the country,” Pourshasb said.
They chose to tackle this issue with a B2B2C model for two reasons. One, Pourshasb said, “people trust their employers. And secondly, we like the fact that there’s this a win-win alignment, that if a company selfishly knows that if their employees are healthier, they’re going to be better for the company, they’re going to stick around, they’re going to be more productive.”
Reduced turnover is one of Minu’s selling points, which also include legal compliance; in 2018, Mexico passed a law, NOM-035, that makes it mandatory for employees to identify and prevent psychosocial risks in the workplace. Now that it is enforced with fines, there’s a “huge wave of companies running to get compliant,” Pourshasb said.
To make sure it captures this growing demand, Minu itself is growing; the company aims to have 150 employees by the end of the year, according to its CEO. This will include expanding its sales and customer success presence across Mexico outside of Minu’s main office in Mexico City and tech hub in Merida.
On the product side, its Series B will also be directed toward new features and offerings, especially around financial and physical health, but also adding HR tools such as surveys — a request from customers, Pourshasb said. This comes in addition to the features Minu added after acquiring Plerk, which offered prepaid cards to workers.
While Minu is expanding its range, it hasn’t left its pay-on-demand roots behind, and recently struck a deal with financial institution Citibanamex where Minu’s earned wage access offering is integrated into the bank’s retail app.
Earned wage access and financial services are one segment where Minu has several competitors, but it also has similarly wide-ranging ones such as Spanish startup Cobee, whose acquisition by French group Pluxee was recently completed for an undisclosed amount.
Minu also declined to disclose the valuation attached to its Series B. But according to QED, which previously led Minu’s seed round and participated in its Series A, it represented “a significant increase from the Series A valuation,” which wasn’t disclosed, either.
What Pourshasb confirmed, however, is that the company raised $47 million in equity to date, including $10 million in a 2023 bridge round that now converted into its Series B. Perhaps more importantly, Pourshasb said that Minu is now on track to “hit profitability by the end of the year.