(Bloomberg) -- Mexico’s payments startup Clip has raised $100 million from Morgan Stanley Tactical Value and another West Coast investor. 

The investment will be used to continue growing in its home market of Mexico, said Clip Founder and Chief Executive Officer Adolfo Babatz in an interview. The investment keeps the valuation in line with the Series D round, which valued the company at $2 billion. 

Clip did not disclose the specific terms of this latest raise, and declined to name the second investor who participated in the round but described it as “one of the largest, most experienced West Coast mutual fund managers.”

The company, founded in 2012, provides payments solutions digitally and through point of sales devices. It also provides financial services, lending products, and software and APIs to the merchants it operates with. Its core area of payments represents more than 85% of the business and is currently profitable, Babatz said. 

“We intend to double down on some of these,” he said. “Depending on the stage the business is in, we either go deeper or we go broader. Even in payments, there’s still a lot of room to go deeper, because there’s still a lot of opportunity and a lot of room to grow.”

About 85% of the company’s merchants only took cash before having access to Clip’s payments services, said Babatz, who estimates that there’s a trillion dollars in transactions waiting to be processed amid an enduring presence of cash in the country. 

The company as a whole is “on the brink of profitability,” he added. Clip has had a history of being frugal with its spending, which played against it in 2020 and 2021 but is now “in the company’s favor.”

In its previous round in June 2021, Clip raised $250 million from SoftBank Group Corp.’s Latin American fund and Viking Global Investors LP. The company has about 800 employees and is looking to grow by as many as 150 employees in the next few years. 

Venture investors have been largely waiting on the sidelines after a 2021 funding bonanza dried up in 2022 amid high US rates, leading to Latin America’s worst year of startup investments since 2018. According to PitchBook data, there were only five triple-digit venture capital deals in the region in 2023, with Brazil’s QI Tech marking the last large transaction. 

Now, Babatz said he sees funding opportunities for companies that show progress and consistency. 

“There’s a lot of money waiting to be invested in good, high quality companies that are delivering results,” he said. “I think that’s our case. We’re happy to share this news with the broader tech community both in Mexico and in Latin America, which I think is in need of some really good news.”

While the window for IPOs in the US is opening again, the possibilities will depend mostly on the US macroeconomic environment, he added. Clip will be watching other companies in emerging markets in the coming months, said Babatz, who declined to disclose upcoming plans for an IPO.

Morgan Stanley Tactical Value is the bank’s non-control private investment unit, and will have an observer seat in Clip’s board.

--With assistance from Cristiane Lucchesi and Daniel Cancel.

(Updates with PitchBook data in ninth paragraph)

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