5 FinTech companies transforming the financial space in Brazil

By Pavithra R

Brazil is a strategic player in the global market and the most influential country in Latin America. The country is said to have the largest online population in Latin America, with 150mn Brazilians connected and 68% owning a smartphone. It is also the largest FinTech hub in Latin America, which is driven by strong growth in the digital banking segments.

According to Global Index database, there are about 48mn unbanked Brazilians. This part of the population moves nearly 204bn USD of the country’s economy per year. The articles list 5 FinTechs disrupting the financial space in Brazil.

Nubank 

Nubank is a well-funded challenger bank in Latin America developing simple, secure, and 100% digital solutions for customer’s financial life. The FinTech launched its first product in 2014, a credit card with no annual fee managed entirely by a mobile application. In 2017, Nubank launched its proprietary loyalty rewards program (Nubank Rewards), as well as a digital account (NuConta) that is already used by more than 17 million people. In 2019, the company began testing its personal loan product and took its first steps in international expansion, opening offices in Mexico and Argentina.

Currently, the firm is standing at a valuation of more than $10 bn. The FinTech is backed by TCV, Sequoia Capital, Kaszek Ventures, Tiger Global Management, QED, Founders Fund, Goldman Sachs, DST Global, Redpoint Ventures, Ribbit Capital, Dragoneer Investment Group, Thrive Capital and Tencent.

Recently, the firm in partnership with Zurich insurance company Chubb launched Nubank Vida, a fully digital life insurance offering. The step marks Nubank’s entrance into the insurance market with a fast, seamless and personalized capability available to its 30M customers across Brazil. This year the firm entered the investments market through Easynvest acquisition and also acquired Plataformatec and Cognitect, in search of talent in software engineering.

EBANX

EBANX is a global financial group with Brazilian DNA which has recently reached the unicorn status. It is a FinTech that offers cross-border payment solutions for global merchants in Latin America. The firm started as the smallest company of the Endeavor program but with its far-reaching vision, commitment to breaking barriers, and investment from FTV Capital has become one of the first unicorns in Brazil.

The company was founded in 2012 to bridge the access gap between Latin Americans and international websites. It has operations in Brazil, Mexico, Argentina, Colombia, Chile, Peru, Ecuador, and Bolivia. Currently, EBANX offers over 100 Latin American local payment options to global merchants and has already helped over 70mn people to access global services and products, with over 1,000 merchants expanding to Latin America.

This year, EBANX launched EBANX GO (in January): A digital account with a prepaid online card available for Brazilian consumers to make payments online and receive 5% of cashback; EBANX Beep(in March): An e-commerce platform that helped SMBs and autonomous workers hit by the crisis of the ongoing COVID-19 pandemic. The firm also expanded its service to Uruguay, launched a logistics startup in the United States, and formed alliance with companies like Uber, Shopify, Amazon, Tinder, PicPay, ACI Worldwide and more.

Creditas 

Creditas was founded in 2012 with the aim of creating a company capable of changing the financial system, a system that had played a critical role in making the population bankable, but which was, at the time, clearly full of inefficiencies that impacted on exorbitant rates of interest and high commissions.

Creditas has recently raised $255 mn in Series E funding and is now worth more than $ 1.75 bn. The firm since the beginning of the pandemic has adopted strategies to better serve its customers. Creditas continues to grow and visions to expand by adopting an increasingly aggressive strategy in 3 phases, including:

• Guaranteed Credit Marketplace (2012-2016): Anticipated a trend towards the digitalization of the Brazilian population and created an online platform that allowed banks to deliver guaranteed credit in the digital environment
• Guaranteed credit platform (2016-2019): Realized the need to gain independence to create quality credit and launched its home equity and auto equity products, migrating from a channel strategy to a product strategy
• Solutions ecosystem (2019-): a new perspective at the market and started a new adventure with the expansion of its credit and FinTech platform, the creation of a vertical of solutions for customers and the internationalization to Mexico.

PagSeguro

PagSeguro, UOL Group Company, is a disruptive provider of financial technology solutions focused primarily on consumers, individual entrepreneurs, micro-merchants, small companies, and medium-sized companies in Brazil. Its mission is to disrupt and democratize financial services in Brazil, a concentrated, underpenetrated and high interest rate market, by providing an end-to-end digital banking ecosystem that is safe, affordable, simple and mobile-first for both merchants and consumers.

Founded in 2006 as an online payment platform to provide the digital payment infrastructure necessary for e-commerce growth in Brazil, the firm expanded from online payments into POS payments in 2013, allowing merchants to receive in-person payments. The company primarily targets underserved clients who have been ignored or underserved by the incumbents.

Its platform enables merchants to offer consumers 37 cash-in methods, choose to obtain early payment of their card receivables on consumer installment transactions, and manage their cash balances on free PagBank digital account, which offers eight cash-out options including wire and peer to peer transfers, QR code payments, bill payments, top up prepaid mobile phone credit, online purchasing through the company’s eWallet, and in-person and online purchases or cash withdrawals using PagSeguro prepaid and cash cards.

Neon 

Neon is a Brazilian FinTech founded by Pedro Conrade with the mission to unite technology and design to redesign and simplify people’s financial experience. Neon was born with a clear purpose: to provide an accessible bank account to any Brazilian, placing user experience at the center of everything. The company started a revolution in the Brazilian market, which still had a lot of participation from traditional banks.

Recently, the firm raised $300 mn in Series C funding led by General Atlantic bringing its valuation to $1.2 bn. The increased demand for digital-based services amid the pandemic has accelerated Neon’s growth trajectory. The firm to meet the increasing customer demand has provided an alternative to in-person banking solutions and has seen a surge in investments, deposits, and online purchases and an uptick of 26% in new users since March.

Neon was launched in 2016 with a simple digital account. Since then, the company has expanded its product suite to include investment products, personal loans, and credit cards, among other new offerings and features.

ALSO, READ: Cool FinTech Report by IBS Intelligence