Ant Invests in R2 to Boost LatAm Embedded Lending

Payments FinTech Ant International is investing in Latin American embedded lending infrastructure company R2.

The investment, announced Thursday (Oct. 30), is aimed at expanding access to credit for small and medium-sized enterprises (SMEs) throughout the region.

“R2 enables digital platforms to offer financing solutions quickly and securely through an API-based, end-to-end white-labeled experience,” the companies said in a news release. “This allows merchants to easily access capital through their existing digital platforms, such as point-of-sale systems, payment processors, marketplaces and eCommerce solutions.”

The release adds that Ant has “complementary strengths” in inclusive financing through its Global Credit Services unit’s Bettr, which introduced SME working capital solutions in Brazil earlier this year.

“Partnering with Ant International is a defining step in R2’s journey,” said Roger Larach, R2’s co-founder and chief executive.

“Together, we will combine world-class risk management, AI-driven underwriting, and capital to bring inclusive credit at scale – empowering millions of small and micro businesses while keeping true to our mission of making access to finance frictionless at the point of need.”

According to the release, R2 was founded in 2020, with operations in Brazil, Chile, Colombia, Mexico and Peru. The company offers its revenue-based financing model through digital platform partners in the region like inDrive, Uber Eats, Rappi, Haulmer and PayU, and has benefitted more than 100,000 SMEs in Latin America.

Research by PYMNTS Intelligence has shown that a majority of small and medium sized businesses (SMBs) believe that embedded lending tools are key to their operations.

“While headlines often focus on sales boosts and consumer convenience, the overlooked story is how accounting departments are leaning on these tools to reduce friction in daily workflows and sharpen their influence over business strategy,” PYMNTS wrote in August.

The research shows that 90% of these businesses said that embedded finance tools integrated into their management platforms were critical for operations.

“For accounting teams, the benefit goes beyond ease of reconciliation,” the report added. “Access to real-time payment and lending data allows staff to build forward-looking cash flow models that once took days to assemble from bank statements and invoices.”

The research also found that 37% of small and microbusinesses were highly likely to switch to a payment provider that offered embedded lending. Among those that actually used embedded lending, that number surged to 69%.

“Accountants, often tasked with sourcing and vetting financing, can now tap into these integrated credit options without leaving their existing software stack, reducing the time and error risk of manual applications,” PYMNTS added.