February 21, 2024

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Credit card giant Visa is buying Brazilian payments infrastructure startup Pismo for $1 billion in cash, in what could be one of the biggest fintech M&A deals so far this year.

Founded in 2016 by Juliana Motta (Chief Product Officer), Ricardo Josua (CEO), Daniela Binatti (CTO) and Marcelo Parise (VP Engineering), based in São Paulo letter It has quietly amassed a number of big-name clients, including Citibank, Itaú (one of the largest banks in Brazil), Revolut, N26, Nubank and Cora.start up Processes nearly 50 billion API calls and $40 billion in transaction volume annually, and supports nearly 80 million accounts and over 40 million cards issued.

In some context of Pismo’s explosive growth, Josua said, it’s less than $1 billion in monthly transaction volume in early 2021. As of 2020, the company has fewer than 10 million total accounts.

Over time, Pismo has expanded beyond its home country and now operates in several countries in Latin America, including Mexico and Chile, as well as the US and Europe. The startup also has some clients in India, Southeast Asia and Australia.

Pismo’s The cloud-native issuer processing and core banking platform is designed to provide “flexibility and agility” to banks, fintechs and other financial institutions, the company said at the time of its release. $108 million raised Received Series B financing in October 2021. Its businesses include allowing customers to launch cards and payments, digital banking, digital wallets and marketplace products. Pismo also claims to allow financial institutions to “take control of their core data and use it intelligently”.

In a written statement, Visa said that by acquiring Pismo, it will “provide customers with core bank and issuer processing capabilities across debit, prepaid, credit and commercial cards through cloud-native APIs.” The company added, The startup’s platform will also help Visa support and connect financial institution clients with emerging payment corridors such as Pix in Brazil.

Jack Forestell, Visa’s chief product and strategy officer, said in a written statement: “With the acquisition of Platinum, Visa can better serve our financial institution and fintech clients by providing them with more differentiated issuer solutions. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close before the end of the year. Pismo will retain its current management team, which will remain based in São Paulo.

SoftBank, e-commerce giant Amazon and Silicon Valley venture capital firm Accel co-led the startup’s Series B round. Falabella Ventures, PruVen, and existing backers Redpoint events and Headline also participated in the round, which brings Pismo’s total funding to $118 million. The company did not disclose its valuation, but Accel partner Ethan Choi told TechCrunch that the sale price was “a very strategic multiple.”

As a SaaS business, Pismo makes money primarily by charging transaction fees. It charges per active account, so prices decrease based on volume. In other words, the more clients a client has, the less they pay per account.

Josua said in a written statement: “At Pismo, our goal is to enable our customers to launch cutting-edge payment and banking products on a single cloud-native platform, regardless of rail, geography or currency. Visa provides us with Unparalleled support as we expand our global presence and help shape a new era of banking and payments.”

Choi said Visa was only one of several companies reportedly bidding for the startup, which was not seeking to be acquired or even seek financing.

“Pismo doesn’t care,” he told TechCrunch. In addition to the deal representing “one of the largest Latin American cross-border fintech deals ever to take place,” According to Choi, this is also an example of “global card networks deciding to forge closer relationships with partner banks and financial institutions, offering them core banking and card issuance services in addition to credit and debit cards” Card Rail. “

He added: “Being able to sell these really critical APIs to existing financial institution customers creates a lot of synergies.”

This isn’t the first time Visa has been involved in infrastructure development. March 2022, it closes $2.15 billion acquisition of Tink, Leading European fintech startup focused on Open Banking APIs.

The credit card giant also dropped a $5.3 billion acquisition plan. Plaidis a popular U.S.-based open banking startup that had to call off an acquisition after encountering issues regulatory wall.

There is no doubt that the acquisition of Pismo by Visa is a coup for the entire Latin American region, which has seen a surge in user numbers. Global investors are flocking to the region 2021, and a little more retreat since.It’s also a comeback story Considering 2019, Pismo has burned through the cash it raised in its $900,000 seed round in 2016. In fact, things got so bad that Binati and Paris even sold their one and only car to finance Pismo’s operations. Now, just over 400 of the company’s employees will become Visa employees.

The deal also marks Accel’s second acquisition of a financial infrastructure company, which was acquired shortly afterwards. In 2020, Consumer financial service platform SoFi announces Obtain Payment and Bank Account Infrastructure Companies Galileo Cash and stock totaled $1.2 billion.Founded in 2000, the company was profitable before Accel wrote about it $77 million Series A check 2019.