Mexican SME-focused digital banking platform Covalto is set to go public via a merger with special purpose acquisition company (SPAC) LIV Capital Acquisition Corp.

The new combined firm will be known as Covalto, and it will be the first Mexican fintech to be listed on a US stock exchange.

The merger is worth $547 million to Covalto and will create up to $177 million in the capital before costs.

LIV Capital will also provide $60 million in funding for the purchase, allowing the company to continue its growth trajectory, extend its product portfolio, and hunt for M&A prospects in Mexico and Latin America.

Covalto, formerly Credijusto, is a “one-stop solution for SMEs,” offering credit products, banking services, and a comprehensive suite of business analytics solutions to thousands of firms.

“Due to limited innovation and the outdated technology of incumbent banks, SMEs in Mexico are insufficiently integrated into the modern banking system and are not able to fully access the world’s growing digital economy.

“We built Covalto to address this challenge and unlock the potential of Latin American SMEs via digital banking and credit solutions.”

                                                                                                David Poritz, co-CEO, Covalto.

Covalto was the first Mexican fintech to purchase a regulated bank last year, giving the company direct access to Mexico’s interbank payment system and dramatically decreasing its funding costs.

LIV Capital raised $114.5 million in its first public offering on February 7, 2022, with the goal of combining with a technology company in a “high-growth and underdeveloped market in Mexico.”

“The convergence of financial services and technology is driving disruption in the Mexican market, and Covalto is at the forefront of this trend.”

                                                                                  Alex Rossie, Chairman & CEO, Covalto.