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Neobanks in South America; Swedish Payments Firm Trustly Eyes $11 Billion IPO

Neobanks in South America; Swedish Payments Firm Trustly Eyes $11 Billion IPO
By David Penn Posted on
Categories: EyeVerify, Finovate Global, Nubank, Trustly

Earlier this week we reported on the $400 million Series G closed by Brazilian neobank – and Finovate alum – Nubank. The firm, founded in 2013 and based in Sao Paulo, serves more than 34 million customers in Brazil, Mexico, and Colombia, and offers a digital savings account, a no-fee credit card, as well as personal loans. This week’s investment boosts the company’s total capital to $1.2 billion and gives the Brazilian digital bank a valuation of $25 billion.

We also suggested that Nubank’s news was a good opportunity for fintech fans to “brush up” on fintech in general when it comes to Latin America – and the region’s challenger banking industry in specific. To this end, for this week’s Finovate Global Reports, we are sharing this look at neobanks in South America, courtesy of Fintechnews Switzerland.

“South America has seen an exceptionally dynamic evolution of its neobanking landscape,” the authors wrote, “with now more than 30 live neobanks and digital banks that serve over 50 million customers out of the region’s 430 million+ population (+11%), data from Dutch fintech consultancy firm Fincog shows.”

An Overview of South America’s Booming Neobanking Sector is a great way to get to know how and why challenger banks are finding fertile ground in countries ranging from Brazil and Colombia to Peru and Argentina.

Swedish payments company Trustly, which made its Finovate debut back in 2013 at FinovateEurope in London, is betting that even after a year that featured a record number of initial public offerings, the investing public is hungry for more.

Reuters reported earlier this week that Trustly is planning an initial public offering in Q2 of this year that could earn the company a valuation of $11 billion (EUR 9 billion). Nordic Capital, which acquired Trustly in 2018, is said to be working with Goldman Sachs, JP Morgan, and Carnegie, with additional banks to be brought onboard as well. According to Reuters, the company is targeting “late April or early May” for an IPO. Both Trustly and Nordic Capital have not commented on the IPO rumor.

Headquartered in Stockholm and founded in 2008, Trustly specializes in enabling payments directly from customer online bank accounts. Trustly processes more than four million payments a month and reported revenues of EUR 130 million in 2019. The company estimates 2020 revenues of EUR 200 million. Trustly has more than 7,600 bank partners and 600 million consumers in Europe and North America who rely on its account-to-account network to bypass the card networks simply and securely.

In 2019, Trustly merged with PayWithMyBank, a U.S.-based company, to provide what Trustly CEO Oscar Berglund called “the first and only online banking payments network with transatlantic coverage.” Berglund added that the union of the two firms was “transformative” and said it would “accelerate” Trustly’s goal of reaching global coverage.

“Together we’re thrilled to be able to offer merchants and billers a unique alternative to card payments, allowing them to accept payments from 600 million consumers across Europe and the U.S.,” he said.

Earlier this month, Trustly announced the appointment of new Group Chief Financial Officer Mats Backman. Backman comes to Trustly after a tenure as CFO at publicly-traded automotive technology company Veoneer. Last fall, the Swedish payments innovator added a number of executives to its ranks, including Karim Ahmad as its new Global Chief Technology and Product Officer. Ahmad was formerly the Chief Product and Transformation Officer at Paysafe Group.

Here is our look at fintech innovation around the world.

Latin America and the Caribbean

Asia-Pacific

  • EyeVerify, which twice won Finovate Best of Show awards for its biometric authentication technology, may be on the market after being acquired by Ant Financial in 2016 for $100 million.
  • Malaysian-based supply chain finance and P2P financing platform CapBay raises $20 million in Series A.
  • Robowealth, a fintech based in Thailand, secures Series A funding from Beacon Venture Capital, Kasikornbank’s corporate VC arm.

Sub-Saharan Africa

  • Mobile banking startup Spot Money launches in South Africa, billing itself as the country’s first open banking platform.
  • Kenya-based Safaraicom goes live with its M-Pesa bill management service.
  • Synthesis launches Halo, the first of its kind tap-on-phone contactless payment solution for the African market.

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Photo by Jonathan Petersson from Pexels

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