Latin American Payments Giant EBANX Expands Operations in Mexico; Itaú Unibanco to Acquire Brazilian Broker Ideal

Latin American Payments Giant EBANX Expands Operations in Mexico; Itaú Unibanco to Acquire Brazilian Broker Ideal

Latin American payments company EBANX is doubling down on its commitment to its business in Mexico, opening its first office in Mexico City and introducing a range of solutions designed to help Mexican companies offer new payment experiences for their customers in-country. These solutions include credit and debit cards, installments, OXXO and OXXOPay, SPEI, and digital wallets like Mercado Pago.

“The launch of these local solutions and the opening of the new office are part of our strategy for continuous growth in Mexico, a country where e-commerce is one of the most dynamic and relevant sectors,” EBANX co-founder and CEO João Del Valle said. “With these new initiatives, we became the ideal strategic ally to help e-merchants grow their operations in Mexico or other LatAm markets.”

For EBANX, bringing broader payment options to Mexican consumers is a way to better serve the country’s unbanked population. According to the Association of Mexican Banks, 53% of Mexican adults not have a bank account as of 2020. At the same time, the company’s own study on digital commerce in Mexico revealed that as much as 60% of the digital commerce in Mexico is conducted using payment methods ranging from digital wallets and cash vouchers to debit and credit cards. By enabling more merchants in Mexico to process both cash-based transactions as well as these methods preferred in digital commerce, EBANX believes it can help merchants in the country increase their reach and sales potential by 2x and increase their total addressable market faster.

Founded in 2012 and headquartered in Curitiba, Brazil, EBANX has been active in the Mexican market since 2015. Last year, the company grew the number of transactions processed in Mexico by 115%. Hibobi, SHEIN, Shopee, and Wish are among EBANX biggest customers in the country.


Earlier this week we announced the decision by Canadian fintech FundThrough to acquire rival BlueVine’s invoice factoring business. Today we learned of another big acquisition in the fintech space in the Americas: Brazil’s Itaú Unibanco announced on Thursday that it would acquire Brazilian cloud-based brokerage firm Ideal.

The acquisition is slated to take place in two parts. First, Itaú will acquire 50.1% of the share capital of Ideal, which was founded in 2019 and is one of the leaders in traded volume on the Brazilian stock exchange, B3. Second, the bank plans to execute its right to purchase the remaining 49.9% of the brokerage’s shares for approximately $117 million (R$651 million) securing control of the company. Stage two of the acquisition plan is reportedly not scheduled to take place for another five years.

“This investment materializes our mantra of client centrality because they are the ones who will get the most out of the transaction,” Itaú Unibanco president Milton Maluhy Filho said. “Ideal is going to help us expand and standardize the offer for different channels. Customers from various segments of the bank, such as iti, ion, or even Itaú Corretora, will be able to have access to the same products on whichever platform they prefer.”

The acquisition will add to the talent base for the 60-million customer financial institution, which bills itself as a digital bank with the convenience of physical banking. Ideal CEO Nilson Monteiro will continue to oversee operations at the company with Itaú serving essentially as one of Ideal’s financial institution clients. Itaú Unibanco’s Carlos Constantini, who runs Wealth Management and Services for the bank, underscored the importance of maintaining Ideal’s autonomy, citing the company’s market position and “well-defined strategy for its segment of activity.” Constantini added, “the company will play an important role in consolidating Itaú Unibanco’s investment ecosystem and maintaining our market leadership.”

Founded in 2008 via the merger of Banco Itaú and Unibanco, Itaú Unibanco is headquartered in São Paulo, Brazil. With total assets of more than $377 billion and 90,000 employees, Itaú Unibanco is the largest private sector bank in the country. The institution is publicly traded on the Brazilian stock exchange and has a market capitalization of $41 billion.


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Will 2022 Be the Year Central Bank Digital Currencies Break Out?

Will 2022 Be the Year Central Bank Digital Currencies Break Out?

The news is flying a bit under the radar. But from China to Bahrain to Jamaica, central banks are beginning 2022 having made major moves recently in support of digital assets.

We covered China’s CBDC announcement earlier this week. In short, the People’s Bank of China, the country’s central bank, made its digital yuan wallet available via both the Android and Apple app stores. Select Chinese citizens in a wide range of provinces – including Shenzhen, Shanghai, and Chengdu – will be able to download the e-CNY wallet. The Chinese government hopes that there will be significant use of the technology in the weeks leading up to the Winter Olympics in Beijing, which could represent a showcase for the digital currency.

Halfway around the world, the Central Bank of Bahrain (CBB) announced that it has successfully completed its test with Onyx by JPMorgan’s JPM Coin System. The test, the first of its kind in the MENA region, enabled Bank ABC to launch real-time payments for Aluminum Bahrain (ALBA) in the U.S. JPM Coin is a permissioned system that provides payment rail and deposit account ledger services that allow participants to transfer U.S. dollars that are held on deposit with JPMorgan.

“We at the Central Bank of Bahrain are extremely pleased to announce the success of this test which aligns with our vision and strategy to continually develop and enrich the capabilities extended to the stakeholders within our financial services sector in the Kingdom using advanced and leading emerging technologies,” Central Bank of Bahrain Governor Rasheed Al Maraj said in a statement.

JPM Coin is the inaugural product offering from JPMorgan’s Onyx, a blockchain-based platform that facilitates the exchange of value, data, and digital assets. Onyx was formed in 2020.

Several hundred miles to Bahrain’s west, the Bank of Jamaica (BOJ) announced that it also has completed a cryptocurrency pilot. Here, the digital asset is a central bank digital currency (CBDC), which has been undergoing testing in the island nation for the past eight months. The project was conducted in partnership with Irish fintech eCurrency Mint, a company with a 10+ year pedigree in innovation on CBDCs. The stated goal of the initiative was to determine “whether a central bank digital currency along with the attendant technology solution could be successfully implemented in Jamaica.”

Three specific tasks were part of the test: minting of the CBDC, issuing the CBDC to wallet providers, and distributing CBDCs to retail customers. This final component of the test involved wallet provider NCB, and the successful onboarding of 57 customers who conducted person-to-person, cash-in, and cash-out transactions with small businesses as part of an NCB-sponsored event in December called “Market on the Lawn.”

In the wake of the successful test, the Bank of Jamaica has planned a national roll-out of its new CBDC in the first quarter of 2022. The roll-out will feature the continued onboarding of new and existing customers by NCB, the introduction of two additional wallet providers, and a test of transactions between customers of different participating wallet providers to establish interoperability.

Note that Jamaica’s Caribbean neighbor, the Bahamas, launched its CBDC, the Sand Dollar, in October of 2020. The Sand Dollar is the the world’s first official central bank digital currency to reach full circulation.


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Fintech in the Nordics: Innovations in Authentication and Opportunities in Acquisition

Fintech in the Nordics: Innovations in Authentication and Opportunities in Acquisition

Norway-based biometric startup Mobai won $3.16 million (EUR 2.8 million) in funding to enhance the protection of personal biometric data in coalition with Vipps BankID, Sparebank1 Østlandet, KU Leuven, and NTNU. The project, named SALT for “Secure privacy preserving Authentication using faciaL biometrics to proTect your identity,” will bring new functionalities to Mobai’s facial recognition solution, and improve the quality of the technology to help firms meet eiDAS and AML regulations.

The project will drive innovation in the field of facial biometrics, particularly in the areas of biometric template protection, face quality assessment, and presentation attack detection. Mobai CEO Brage Strand noted in a statement that innovation in facial biometrics is especially urgent insofar as vulnerabilities in current authentication strategies such as passwords and even two-factor authentication increasingly have been exploited by fraudsters and cybercriminals.

“Our aim is to offer consumers a unique opportunity to prove who they are, as a way to combat the surge in phishing and identity theft we currently experience,” Strand said. He added the goal of the project was to move “beyond comparing a photo you store on a device with a selfie” to bring the same level of trust found in ePassports “into a digital domain.” Strand also emphasized the importance of leveraging “privacy-preserving technology” to ensure GDPR compliance and the integrity of personally identifiable information.

Mobai’s partners represent an interesting cross-section of the country’s financial services industry. Sparebank1 Østlandet is the fourth largest savings bank in Norway. Vipps is a payments and electronic ID provider with more than four million electronic ID users. NTNU is the Norwegian University of Science and Technology, the largest university in the country with more than 40,000 students; Mobai was spun out of NTNU’s Norwegian Biometrics Laboratory in 2019. Katholieke Universiteit Leuven is a research and educational institution, one of the oldest universities in Europe, with a reputation for pioneering scientific research.

“We see face recognition as a very promising and effective way to add an extra layer of security that will help combat identity theft, fraud, and money laundering,” Sparebank1 Østlandet EVP for Innovation and Business Development Dag Arne Hoberg said. “Imagine a situation where you may actually sign a mortgage electronically and use a ‘selfie’ as part of this process to confirm that your are the right person to sign.”


Meanwhile, in nearby Denmark, leading business automation software and services provider Visma announced its acquisition of expense management company Acubiz. Term of the transaction were not immediately available.

Visma will integrate Acubiz’s expense management solution into its Visma Enterprise HRM, but Acubiz will continue to function as an independent brand. The company, which has a 20% market share in Denmark and more than 200,000 users, offers solutions to help businesses better manage employee and travel expenses, as well as mileage reimbursement, invoice management, and time registration.

“I am excited to welcome another strong, Danish company into the Visma family,” Visma Enterprise A/S Managing Director Monika Juul Henriksen said. “There is no doubt that Acubiz is a perfect match not only businesswise but also in their culture and DNA. Acubiz wants to be the best – and so do we. Together, we will be even better.”

Founded in 1997 by Lars de Nully, Acubiz is based in Birkerød north of Copenhagen. This year, the company has forged partnerships with accounting firms Tal & Tanker and Tietotili, as well as with financial administration services provider Fiscales, HR software company Sympa, and Jutlander Bank.

In a year-end statement published on the Acubiz blog, the company noted that, in addition to its acquisition by Visma, it plans to unveil a new financial interface in 2022. The new UI will feature upgrades in performance, user-friendliness, and the ability to customize.

“By becoming a part of Visma, we do not only get a shortcut to new customers, markets, segments, and partners, we will also benefit from the knowledge and skills within legal, HR, marketing, and sales,” Acubiz Managing Director Henrik Malling said. “Being able to counsel with these experts is immensely valuable for us as a relatively small organization. So we honestly cannot wait to get started and to get to know all our new colleagues within Visma.”


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Brazilian Digital Bank Nubank Raises $2.6 Billion in U.S. IPO

Brazilian Digital Bank Nubank Raises $2.6 Billion in U.S. IPO

Selling nearly 290 million shares priced at $9 in its initial public offering on the New York Stock Exchange this week, Brazilian digital bank Nubank has raised $2.6 billion, reaching a market value of $41 billion. An alumni of Finovate’s developer’s conference FinDEVr in 2016, Nubank is now the most valuable financial institution in Latin America in addition to being the world’s biggest digital bank. CEO David Vélez, who co-founded the company in 2013 with an initial investment of $2 million from Sequoia Capital and Kaszek Ventures, now owns a stake in the company worth $8.9 billion at the IPO price.

“We don’t think the banking branch will survive the way it is,” Vélez said to CNBC this week. “It is too costly to serve the majority of users, especially in emerging markets where you have a very high cost of operations, so a lot of that physical infrastructure will probably disappear.” Vélez predicted that most financial services providers will transition into digital entities in the next five to ten years because of this, leading to an increased focus on customer service as well as lower costs and interest rates.

With more than 48 million customers in Brazil, Mexico, and Colombia, and onboarding more than two million new customers a month on average, Nubank offers financial products for spending, savings, investments, loans, and insurance. The company claims to have provided more than five million people with their first credit card or bank account as of September 30, and to have saved its customers more than $4 billion (R$27 billion) in bank fees and more than 113 million hours of waiting time since inception.

Vélez said that the capital from the IPO will help fuel Nubank’s expansion in Mexico and Colombia, en route to becoming a truly pan-Latin American banking services provider. “There is a lot of opportunity to build the next generation of financial services, so we will continue to invest and grow for a very long time,” Vélez said an interview with the Financial Times.

This fall, Nubank acquired AI-powered assistant company Olivia, announced partnerships with a number of retailers to add a digital commerce section to its app in November, and purchased e-commerce payments company Spin Pay.


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Jefa Brings Financial Empowerment to Women in Latin America

Jefa Brings Financial Empowerment to Women in Latin America

With plans to launch initially in Mexico before expanding to Colombia and Central America, fintech startup Jefa is out to do what even the most innovative challenger banks have so far failed to do: bring better financial opportunities to women in Latin America.

Company CEO and founder Emma Sanchez Andrade Smith highlights the fact that nearly 1.3 million of the world’s 1.4 million underbanked people are women. Add to this the problem that the majority of new, digitally-oriented financial institutions are focused on mature markets in Europe and the United States rather than in emerging markets. Combined, these two facts represent a major challenge for women in developing markets – and a potential opportunity for creative fintech entrepreneurs.

Jefa announced earlier this week that it has secured $2 million in seed funding to bring financial empowerment women in Latin America and the Caribbean. More than a dozen investors participated in the round, including The Venture Collective, partners of DST Global, Foundation Capital, Amador Holdings, The Fund, FINCA Ventures, Rarebreed VC, Siesta Ventures, Springbank Collective, Bridge Partners, Hustle Fund, Foundation Capital, Latitud, J20, and Magma Partners. A number of angel investors such as Daniel Bilbao, JP Duque, Ricardo Schaefer, Jean-Paul Orillac, and Allan Arguello were also involved in the financing.

Founded in 2020, and an alum of TechCrunch’s Startup Battlefield, Jefa has 115,000 women on its waitlist and the backing of Visa, with whom the firm forged a seven-year strategic partnership. The alliance will enable Jefa to launch a Visa card for the Mexican market, where more than half of the country’s women are unbanked.

“Visa believes in empowering women – from entrepreneurs to home-makers,” Visa Latin America and the Caribbean Senior Director of Fintech Partnerships Sonia Michaca said. “Financial and digital inclusion transform economies. Women, who control the lion-share of everyday household spending, should be at the core of this transformation, yet women are vastly underserved by traditional banks.”

Visa sees the partnership also as a way to help respond to growing demand for contactless payment options. A recent study led by the company underscored rising interest for contactless payments from women in Latin America, with 44% of female consumers in Brazil reporting more frequent use of contactless payments and 58% saying they would not shop at a store that did not offer them. With Jefa, women need only a government-issued ID to open a free, “no minimum balance required” account and access built-in savings apps as well as other “women-tailored features.”

“Jefa is a solution for women that empowers them with the tools they need to create a better livelihood,” Smith said. “At Jefa, we take a multifaceted approach that addresses the numerous barriers women face to entering the global economy. This includes using gender-disaggregated data to inform our product, designing distribution channels to reach women in place they trust, and providing services that are tailored to their distinct financial behavior.”

A graduate of Duke University and The London School of Economics and Political Science (LSE), Smith previously co-founded Eversend, Africa’s first neobank, in 2018. She was also the director of Togo-based Microfinance des Jeunes de Farende where she launched and ran the first microcredit organization for youth in West Africa.


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South African Payment Gateway Ozow Scores $48 Million in Round Led by Tencent

South African Payment Gateway Ozow Scores $48 Million in Round Led by Tencent

Ozow, a payment gateway based in South Africa, has secured $48 million in Series B investment in a round led by Chinese fintech Tencent. The funding boosts the company’s total capital raised to more than $51 million. The company said the funding will be used to promote fintech regulation – particularly open banking – to help more people gain access to payment services.  The new capital will also enable the seven-year old fintech to enter new markets throughout sub-Saharan Africa and add employees. Namibia, Ghana, Kenya, and Nigeria are among the countries Ozow is currently targeting for expansion.

Co-founded by current CEO Thomas Pays, Ozow enables consumers to pay for transactions directly from their bank accounts. This kind of service has special potential in a country like South Africa where only 20% of those who have bank accounts have and use credit cards. Ozow has six million users of its technology and Pays claims that the company is adding 140,000 users and processing $100 million in transactions every month.

Also participating in Ozow’s latest round were Endeavor Catalyst and Endeavor Harvest Fund.

Using Ozow is straightforward. Consumers choose Ozow as a payment option when making purchases either online or in-person. Then they select their bank, log in with their online banking credentials, and allow Ozow to automate the actual payment process. Free to use for individual consumers, merchants are able to use Ozow’s platform for free for the first 12 months – or a maximum of $65,000 in processing value each month. In order to receive payments, merchants only need a bank account and a smartphone or similar device. Ozow includes Vodacom, MTN, Takealot, and Uber among its enterprise clients.

Pays said that his team had been “engaging with Tencent” since the spring, and that the company understood “the scale and opportunity” available in investing in a company like Ozow.

“It’s an honor to bring on board Tencent, Endeavor Catalyst, and Endeavor Harvest Fund,” Pays said in a statement. “This is a validation of our role in transforming the banking industry through the development of innovative, convenient, and more inclusive payment solutions for everyone.”


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The Philippines’ Lone Fintech Unicorn Secures $300 Million in New Funding

The Philippines’ Lone Fintech Unicorn Secures $300 Million in New Funding

In a round led by Warburg Pincus, Insight Partners, and Bow Wave Capital Management, Philippines-based mobile payment company Mynt has secured $300 million in new funding. The investment, which also featured participation from Itai Tsiddon, Amplo Ventures, Globe Telecom, and Ayala Corporation, gives Mynt a valuation of more than $2 billion and solidifying the company’s status as the biggest technology unicorn based in the Philippines.

“We have been able to continuously expand by introducing game-changing innovations while improving our profitability profile,” Mynt president and CEO Martha Sazon. “We are excited about our new partnership with Warburg, Insight, Itali Tsiddon, and Amplo, as they each bring strategic value to our team in the pursuit of our vision towards finance for all.”

Owned by Philippine mobile operator Globe Telecom, Mynt is the company behind the GCash app. The popular solution enables customers to buy prepaid airtime; pay bills at more than 600 partner billers throughout the Philippines; send and receive money anywhere in the country; as well as access savings, credit, insurance, and investment products and services. GCash currently has more than 48 million users.

Most recently, Mynt has piloted a new cash loan offering, GLoan, that enables qualified borrowers to take out loans of up to PHP25,000 (approximately $500 USD) that can be repaid over 12 months. GLoan joins the company’s GCredit offering, which disburses more than PHP1 billion ($200 million USD) in loans every month and has disbursed PHP15 billion ($3 billion USD) as of June of this year. Mynt notes that its GCredit solution has the best repayment rates with the lowest number of past-due and non-performing loans locally. Unsurprisingly, Mynt is also looking to offer Buy Now Pay Later services “within the year” as well.

Mynt’s GCash is also one of the growing number of financial apps to incorporate pro-environmental functionality into its solution. The app has a feature, GForest, that serves as a gamified environmental stewardship program that enables users to convert points earned from using GCash into a virtual tree. These virtual trees are then planted as actual trees in specific locations in the Philippines. Mynt says that it has 8.7 million users of GForest within the GCash app.

Founded in 2015, Mynt has been recognized as a leader in the digital transformation of payments and other financial services in the Philippines during the COVID-19 pandemic. With nearly half the country’s population using its technology, Mynt is on pace to reach a gross transaction value of PHP3 trillion, more than triple of what was achieved last year. The company has reported peak daily app log-ins of 19 million and daily active transactions of 12 million.


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Instant Payments, TED, and PIX: Open Banking Advances in Brazil

Instant Payments, TED, and PIX: Open Banking Advances in Brazil

This week marks the beginning of Phase 3 of Brazil’s embrace of open banking. Phase 3 is the second-to-last stage of the implementation plan set out by the Brazilian Central Bank. According to reports, Phase 3 arrives about one month late – the original date was September 30th – but the changes that the newest phase of the open banking initiative will bring are significant enough to be worth the wait.

Divided into four parts, the goal of Phase 3 is to usher in the regulation of payment initiation from any online platform. This will initially involve enabling consumers to pay for products and services using PIX – without the consumer having to use their bank’s app. PIX is the smartphone-based, instant payments technology launched by the Brazilian central bank almost a year ago. The second part of Phase 3, enabling payments made with TED (transferência eletrônica disponível) and transfers between accounts of the same bank, is set to begin in mid-February of 2022; the third part, enabling payments via bank slip, is slated to begin in late June; and the fourth and final part of Phase 3, enabling payment by debit account, is set to go live at the end of September.

Payment initiation is only one component of the open banking project Brazil has undertaken. Giving consumers the ability to make price comparisons, as well as compare rates and credit offers, are also major new possibilities for consumers that will be available thanks to the introduction of open banking in the country. These elements are expected to begin at the end of March 2022.

“The initiation will have a great impact especially on fintechs, which may offer more practical solutions for consumers or improve your internal financial processes from direct payment,” Belvo General Director Albert Morales explained. “Large banks, on the other hand, should start to rethink prices and solutions offered, both to attract new users and to retain users.”

Brazil’s open banking project, approved in 2019 by the country’s central bank, is part of a larger modernization effort for the Brazil’s entire financial system. And while the global pandemic has played a major role in complicating the project’s original timeline, officials expect open banking to be fully implemented in the country by September of next year.

Read more about Brazil’s open banking project in this interview with Otávio Damaso, Regulation Director for Brazil’s central bank, conducted by The Paypers last month. Damaso explains why Brazil has embraced open banking, and how open banking fits into the larger context of regulatory changes and trends in the country.


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A Look at the Fintech Unicorns of Southeast Asia

A Look at the Fintech Unicorns of Southeast Asia

This week’s Finovate Global List Series feature takes a look at the roster of Southeastern Asia-based technology unicorns compiled by Credit Suisse’s ASEAN research team in a recent report to see how many of these 35 billion-plus valuation companies are fintech firms.

“The number of unicorns in ASEAN has continued to increase over the last two to three years, now adding up to 35 unicorns,” the report authors noted. Scaling New Heights: ASEAN’s 35 Unicorns reveals that Singapore and Indonesia are home to the lion’s share of the region’s unicorns and that fintech represents the most common sector, followed by e-commerce.

In terms of factors fueling the growth of these firms, the report highlights the role of private equity/venture capital funding, strong demographics – particularly populations with a high number of citizens under the age of 34 – and supportive regulations. The report also underscored the role of COVID-19 in stimulating innovation: “Fintech is still relatively nascent given that 25% to 50% of the region’s adult population remains underbanked or unbanked, but the COVID-19 pandemic has accelerated the adoption of digital financial services.”

Read the full report here. In the meanwhile, here is our look at the fintech unicorns from Credit Suisse’s ASEAN unicorn roundup.

Indonesia

  • Akulaku: a banking and digital finance platform providing digital banking, consumer credit, digital investment, and insurance brokerage services to underserved consumers in Indonesia, the Philippines, Vietnam, and Malaysia.
  • OVO: a digital payment service, headquartered in Jakarta, that offers one of the biggest e-wallets in Indonesia.
  • Xendit: an end-to-end digital payments solution provider for small businesses and large enterprises alike.

The Philippines

  • Mynt: a fintech partnership between Globe Telecom, the Ayala Corporation, and Ant Financial focused on payments, remittances, loans, business solutions, and platforms.

Singapore

  • Advance Intelligence Group: an AI-driven technology parent company offering buy now pay later services, digital lending, and e-commerce products and services.
  • Matrixport: a digital assets and financial services platform that supports investing and trading in cryptocurrencies.
  • NIUM: an international payments platform for cross-border payments, local accounts, and card issuance.

Thailand

  • Ascend Money: a digital payments and financial services company providing wealth management, lending, and insurance products to 50 million users in six countries in Southeast Asia.

Vietnam

  • Vietnam Payment Solution (VNPAY): a Hanoi-based electronic payments solution provider offering mobile banking, phone recharge, and billpay for banks, e-commerce businesses, and telecoms.

Not included in our round-up are a handful of companies characterized by Credit Suisse ASEAN Research as “e-commerce” or “real estate tech.” These firms include Blibli and JD.ID of Indonesia, Carsome of Malaysia, and Carousell, Carro, Lazada, and Moglix of Singapore among the e-commerce unicorns. The region’s real estate technology unicorns featured include Singapore’s JustCo and PropertyGuru.


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Emerging Markets Lender Tala Scores $145 Million in Series E Funding

Emerging Markets Lender Tala Scores $145 Million in Series E Funding

In a round led by Upstart, and featuring participation from DeFi network Stellar Enterprise Foundation and new investors Kindred Ventures and the J. Safra Group, emerging markets digital lender Tala has raised $145 million in funding. The Series E round takes the company’s total capital raised to more than $350 million. The investment also gives the company a valuation estimated at more than $800 million.

The new capital will help the company continue to offer lending services to both consumers and small businesses. The additional funding will also enable Tala to “accelerate the rollout” of a new offering: a financial account designed to make it easier for its customers to “grow, save, and manage” their money. Tala currently provides loans between $10 and $500 and noted in a blog post that more than six million people have used its app since inception. The company has customers in Kenya, the Philippines, Mexico, and India who have borrowed a total of $2.7 billion. Tala added that more than 12,000 new users are signing up for the service every day.

Tala is also looking to expand into the digital asset business, as well. “We’ll also work to develop one of the first mass-market crypto products for emerging markets to help make crypto solutions more affordable and equitable for those who need them most,” the company added. Tala will use its new relationship with the Stellar Network to pursue this project.

Tala evolved from InVenture, a company launched by Tala founder and CEO Shivani Siroya to help micro-entrepreneurs in Africa and India build credit histories. The rebrand was an effort to move “beyond building just credit scores to become a company that will also take the first risk on our customers and lend to them directly.” Tala leverages applicant phone data and activity (such as the timeliness of bill payments) to establish creditworthiness and to determine appropriate lending amounts. Via the Tala app, borrowers can apply for funding in minutes and, once approved, can have funds deposited in their accounts or sent to a preferred cash out location in seconds.

This week’s investment also featured participation from existing investors including IVP, Revolution Group, PayPal Ventures, and Lowercase Capital. Launched in Nairobi, Kenya, Tala is currently headquartered in Santa Monica, California.


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Cryptocurrencies, Financial Inclusion, and a Look at El Salvador’s Big Bitcoin Bet

Cryptocurrencies, Financial Inclusion, and a Look at El Salvador’s Big Bitcoin Bet

One of the biggest experiments in bringing cryptocurrencies to the mainstream is taking place in the small Central American nation of El Salvador. Earlier this summer, the country’s legislative assembly authorized granting Bitcoin status as legal tender inside El Salvador beginning September 7th. One month after Bitcoin joined the U.S. dollar as the second official currency in the country, what can be said of the project so far?

This morning, Reuters took up the question of Bitcoin adoption in the country and discovered that the initiative has boosted use of the cryptocurrency, but that increase in use has come with more than a few “headaches” for many Salvadorans who have attempted to withdraw cash from Bitcoin wallets or make other transactions with the digital asset.

On the adoption front, Forbes reported late this week that the Bitcoin project has resulted in more Salvadorans having digital, Bitcoin wallets than traditional bank accounts. According to the article, approximately three million Salvadorans have downloaded Chivo, the new, government-sponsored digital wallet to facilitate Bitcoin transactions. This adds up to 46% of the country’s 6.8 million population. “By contrast,” Forbes noted, “as of 2017, only 29% of Salvadorans had bank accounts.” The Forbes account also observed that Chivo is not the only option available to those seeking to transact in the cryptocurrency; the availability of other digital wallets suggests that the estimates on early Bitcoin adoption by El Salvador’s citizens could be significantly higher.

El Salvador president and long-time Bitcoin backer Nayib Bukele boasted recently of negotiations with the country’s largest gas stations to offer reduced prices for those paying for gasoline using the Chivo app. But widespread adoption by the country’s retailers will still be one of the initiative’s biggest hurdles. Part of this issue is likely timing- a Reuters story reported that, according to the Salvadoran Foundation for Economic and Social Development, 12% of consumers have used Bitcoin in the month since the Bitcoin Law was implemented, and that 93% of the 233 companies it surveyed were reporting no payments in Bitcoin over the same time period. But another part of the issue may be easily explained by Chivo itself, which provides instant conversion from Bitcoin to dollars – meaning Salvadorans who own Bitcoin can still readily pay for transactions in dollars if they choose to.

Nevertheless, early indications are that the project may accomplish its most important role of promoting financial inclusion – especially among the country’s poorer, rural-based citizenry. While some in the business community remain skeptical – and more aggressive opponents of the measure have resorted to vandalizing and defacing Chivo ATMs – others point to the possible use of Chivo as a way for expat Salvadorans living in places like the U.S. to send money to family still in El Salvador as a use case that could help drive Bitcoin adoption in the country. Potential cost savings of using Chivo instead of traditional money transfer services – as well as the Salvadoran government’s willingness to incentivize Chivo use with Bitcoin bonuses of up to $30 – could help Bukele’s Bitcoin brainchild sustain the momentum it already has achieved in its first 30 days.


Here is our look at fintech innovation around the world.

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

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QisstPay Secures Funding for Pakistan’s Biggest Buy Now Pay Later Offering

QisstPay Secures Funding for Pakistan’s Biggest Buy Now Pay Later Offering

Pakistan-based Buy Now Pay Later platform QisstPay has secured $15 million in seed and pre-seed funding. The round was led by MSA Capital and featured institutional investment participation from Global Founders Capital, Fox Ventures, and First Check Ventures – as well as strategic angel investments from Scalapay co-founders Simone Mancini and Johnny Mitrevski.

The capital, a combination of debt and equity financing, will help the company expand both its services and workforce, ideally boosting its team to more than 100 people by year’s end. QisstPay also believes the funding will accelerate its ability to fund transactions and partnerships with traditional financial institutions in Pakistan, as well as expand its services to neighboring Sri Lanka and Bangladesh.

QisstPay was founded less than a year ago, in November 2020, to solve a very basic problem for consumers in emerging market economies in general and in Pakistan in specific. Many citizens in developing countries do not have the financial means to get approval for credit cards and other forms of consumer financing popular in the West and the more developed economies in Asia. This impacts not only their ability to purchase recreational and luxury goods, but also impairs their access to everyday necessities.

As QisstPay co-founder and CEO Jordan Olivas explained: “After moving here to Pakistan, I noticed how badly the people of this country need a financial tool to help them purchase goods and services that they not only want, but actually need.”

QisstPay offers an installment payment service that responds to this problem by enabling consumers to pay for their purchases in four installments without having to pay interest or worry about late fees. Purchases of between 1,500 and 500,000 PKR (approximately $9 to $3,000 USD) are eligible, and consumers can use both debit and credit cards to make their repayments. The company noted that it plans to enable repayment via digital wallet soon.

The low penetration rate of credit cards and the dominance of cash are some of the reasons why QisstPay has caught on. Add to this the high population of young, digitally-savvy people in countries like Pakistan, and it is easy to see why the company has more than 500 retailers in Pakistan using its service. This includes brands such as Samsung, Diesel, Philips, Xiaomi, and Lenovo, as well as the largest Shopify store in the country.

“Over 60% of Pakistan’s population is under the age of 30, which means that the majority of the country is adopting new technologies,” Olivas said. “Yet so many people still believe that Pakistan isn’t ready to adopt a BNPL system. The rapid growth and use of a platform like QisstPay proves otherwise.”

Tim Chen, General Partner at MSA Capital underscored this point. “Pakistan is one of the most often overlooked countries when it comes to fintech investments,” Chen said. “However, it’s also one of the countries with the most potential.”


For more insight into the fintech ecosystem in Pakistan, check out Tracxn’s highlight of ten of the top fintechs in the country, as well as this list from LocalWriter. One of the most comprehensive looks at the fintech industry in Pakistan in recent times is available in the landscape study by Mohsin Termezy, founder and CEO of Finclude, and Hussam Razi, a Monitoring, Evaluation, and Learning Specialist with Karandaaz Pakistan, published this summer.


Here is our look at fintech innovation around the world.

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe


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