Why QED Invested in Tribal Credit

In the latest installment of the series, QED Investors Partner Lauren Morton explains why we led the $34.3 million Series A and debt round in Tribal Credit, a fast-growing company that has a differentiated suite of products to help SMBs in emerging markets.

Conviction is a funny thing.

Sometimes – rarely – I find it in a first meeting, when the founder, the idea and the opportunity all click and I know I want to be along for the ride.

More frequently, I realize quickly that I won’t find conviction, at least not at this moment in the company’s lifecycles. In these meetings, I have fundamental questions swirling in my head about the viability of the business, product-market fit, TAM or something I can’t quite put my finger on. Often I can’t find a connection with the team that assures me we’ll work well together in the years to come.

And then there are times when conviction takes longer, but in every meeting I learn something new and walk away more curious and impressed than I was going into the call.

I block off hours of the week to test my assumptions of the market as I dig into financial models and data rooms. My list of questions is always too long to get through, but the learning process becomes my ‘conviction process’ – and I get to know the team much better than in the first scenario.

I also get to see the product inside and out, flaws and perfections. Eventually I wrap my head around the opportunity the founder has been telling me from the beginning, and then I can’t wait to spend the coming years learning more and helping this business scale into something great.

Tribal Credit was a ‘conviction process,’ which I’m incredibly excited and grateful to share.

I’ve spent many hours studying the SMB fintech market in Latin America since I joined QED in 2019, which partly explains why I started my discussions with Amr holding several existential doubts in my head. A few I remember distinctly:

• There are a number of credible companies going after this space and there’s an incumbent player in SMB corporate cards (e.g. American Express) that is notoriously hard to unseat. Does this team have any path to a defensible moat?

• Startups in Mexico face a limited market and cross-border expansion is hard. Can this team really build a global business?

• Will the unit economics work once you chip away at interchange with rewards?

• Great product and tech are necessary but insufficient to build a great fintech. Does this team really have what it takes with underwriting, debt strategy, customer acquisition etc.? Can they learn?

I won’t go into all the details of how Amr and Tribal convinced me ‘yes’ for each of these questions, but I will note a few things that ultimately led me to conviction, in a space I hadn’t found it for many months:

• Tribal has built a powerful and differentiated suite of products that expand well beyond corporate cards and BI tools, to high-interest deposit accounts and cross-border payments that far exceed the solutions other players offer today.

• Tribal’s customers LOVE them, and they’re happily shuttering their other accounts one by one.

• Tribal has a powerful sales engine that is scaling with both startup and SMEs in multiple

geographies, most notably Mexico today but with proof points around the world.

• Lastly (for now) and most importantly, Amr and team are truly special leaders. They bring a mix of deep experience in fintech with integrity and the entrepreneurial drive to deliver great products to the world.

All that to say, I have fallen in love with Tribal Credit. I’m very, very excited to see where we go from here.