Konfío

Documented cause

Konfío was a Mexico City-based digital lending platform providing credit to small and medium enterprises in Mexico through data-driven underwriting that used alternative data sources (tax records, invoicing history) to assess creditworthiness of businesses without formal credit history. It raised over $200 million including a $110 million round in 2021 backed by Goldman Sachs, SoftBank, and others, reaching a $1.3 billion valuation. When Mexico's economic slowdown deepened in 2022-2023, SME default rates rose sharply. Konfío's loan book deteriorated, forcing the company to pause lending, cut workforce significantly, and enter a difficult restructuring process. Goldman Sachs wrote down its investment.

Alternative account: Konfío raised $475M in equity and debt to become Mexico's leading digital lender to small businesses. It had grown to unicorn-adjacent scale with $110M+ ARR. Rising Mexican interest rates (Banxico raised rates to 11.25%), increasing SME default rates under inflationary pressure, and higher cost of debt funding squeezed margins to breaking point. In 2023, Konfío executed a major restructuring, laying off 60%+ of staff and refocusing on a smaller, more defensible credit book.

Lesson

Failure anatomy