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Tuesday, October 31, 2023

Brazilian fintech QI Tech lands $200M led by Common Atlantic

Brazilian banking-as-a-service startup QI Tech has raised $200 million in a Sequence B spherical of funding led by New York-based Common Atlantic.

Based in 2018 by Pedro Mac Dowell, Marcelo Bentivoglio and Marcelo Buosi, QI Tech is an infrastructure platform enabling the event of credit score, fee, and banking options by a modular API. It additionally holds a Direct Credit score Society (SCD) license. In Brazil, an SCD is a kind of nationwide financial institution constitution however with some limitations, as defined by CEO Mac Dowell. (QI Tech claims to be the primary SCD accredited by the Brazilian Central Financial institution.)

Primarily, QI Tech permits any firm to behave like a financial institution and provide monetary merchandise to its clients, staff or suppliers. For instance, if a telecom firm decides to supply payroll loans to its staff, “the telecom may accomplice with QI and act like a financial institution,” Mac Dowell mentioned.

Particularly, QI Tech’s providing gives digital registration instruments, knowledge validation, credit score scoring, digital account opening, wire transfers, Pix, financial institution  slips and credit score underwriting for varied sectors of the financial system. It additionally powers a wide range of use instances, together with buy-now pay-later by e-commerce shoppers or the issuance of dwelling fairness and pupil loans by asset managers and fintechs.

“Our key differentiators are the expertise and the mixture of options that create a ‘one-stop-shop’ resolution,” Mac Dowell wrote by way of electronic mail. “The expertise is seamless, any developer can create digital accounts, make funds or difficulty loans in only a few integration steps, like Stripe, however for extra advanced monetary merchandise. In Brazil (and even within the U.S.), there’s no such tech firm that may provide the whole suite of options. Fintechs usually depend on financial institution partnerships to create their product providing, and banks normally have restricted capabilities with trendy modular expertise. QI Tech created an answer that’s the better of the 2 worlds: a tech firm that holds the financial institution license.”

The brand new increase brings the São Paulo-based startup’s whole enterprise capital raised since its 2018 inception to $262 million. QI Tech, which claims to have been worthwhile since its first yr of operation, bootstrapped from December 2018 till November 2021, when it raised $50 million in a Sequence A spherical of funding led by the Sovereign Funding Fund of Singapore (GIC). Throughout Capital, which put $12 million within the firm in October 2022, doubled its funding in QI Tech within the newest financing. The corporate declined to disclose its present valuation.

“For the reason that starting, we aimed for scalability and profitability, a technique that was not very effectively seen however turned out to be the brand new method,” Bentivoglio wrote by way of e-mail. “We stored robust on our foremost beliefs that an organization can construct extremely scalable merchandise with nice money technology (even within the first part).”

Throughout the first half of 2023, the corporate reported $21.2 million in web revenues, a rise of 89% in comparison with the identical interval of 2022. Its greater than 300 clients embody Shopee, Vivo Telefonica and 99 (Didi). The corporate expenses its clients by way of a pay-as-you-go mannequin. Prospects pay a hard and fast price for each transaction they course of utilizing QI Tech APIs.

The corporate at the moment has 120 staff, up from 50 a yr in the past.

QI Tech plans to make use of the brand new capital towards exploring “strategic M&A alternatives” and an “aggressive progress technique.”

“We purpose to speed up progress by acquisitions, and the capital shall be used to finance a couple of transactions that may assist improve our product providing or consolidate a vertical presence,” Mac Dowell mentioned. In December of 2021, QI Tech acquired Zaig, a startup targeted on offering KYC, AML, Antifraud and Credit score Scoring engines. And, earlier this yr, QI Tech acquired Builders Financial institution, a banking utility improvement startup. It additionally plans to make use of the cash towards its lending-as-a-service enterprise, and creating latest verticals, resembling its banking-as-a-service phase (white-label banking and transaction expertise, together with digital accounts and card issuance) and the QI DTVM, the dealer vendor license by which QI Tech can provide administration and custody providers to investments funds.

Luiz Ribeiro, managing director and co-head of Common Atlantic’s Brazilian workplace, mentioned his agency has  tracked QI Tech for a number of years and is impressed “by the imaginative and prescient of the management workforce.”

“We have now been intently monitoring the monetary markets infrastructure in Brazil for years, and QI Tech’s platform is among the most compelling within the area. The corporate has grown considerably (and profitably) in recent times and is continuous to profit from market tailwinds, together with elevated adoption of embedded finance and a rising urge for food for digital funds and credit score merchandise within the nation,” he wrote by way of electronic mail. “Along with secular tendencies, QI Tech stays devoted to offering clients with related, high-quality merchandise – evidenced by excessive buyer satisfaction charges. We’ve been impressed by the management workforce, their execution abilities and ahead imaginative and prescient – all of which permits them to determine and maintain a robust place available in the market.”

Brazil has been dwelling to quite a few profitable fintech firms. Nubank has grown to be a $35 billion-plus digital financial institution that provides bank cards, checking accounts and life insurance coverage to shoppers. And, in late June, bank card large Visa introduced it was buying Brazilian funds infrastructure startup Pismo for $1 billion in money in what’s more likely to be one of many largest fintech M&A offers going down this yr.

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