It appears to be like like everybody and their mom is making an attempt to reinvent the Brazilian banking system. Earlier this yr we wrote about Nubank’s $400 million Series G, final month there was the PicPay IPO filing and as we speak, alt.bank, a Brazilian neobank, introduced a $5.5 million Sequence A led by Union Sq. Ventures (USV).
It’s no secret that the Brazilian banking system has been poised for disruption, contemplating the sector’s little consideration to customer support and exorbitant charge construction that’s left most Brazilians unbanked, and alt.financial institution is simply the latest firm making an attempt to take house a bit of the pie.
Following Nubank’s strategy of launching a financial institution with colours which are very un-bank-like, signaling that they do issues otherwise, alt.financial institution equally launched its first monetary product in 2019 — a fluorescent-yellow debit card which the locals have endearingly dubbed, “o amarelinho,” which means, “the little yellow card.”
The corporate, based by serial entrepreneur Brad Liebman, follows the founder’s $480 million exit of Merely Enterprise, which was acquired by U.S. insurance coverage large Vacationers in 2017.
Not like many fintechs, alt.financial institution has a robust social mission and pays commissions for referrals that final for the buyer’s lifetime.
“Most fintechs simply assist rich individuals get wealthier, so I assumed let’s do one thing with a social mission,” Liebman informed TechCrunch in an interview.
To drive house the mission, and actually goal the unbanked, Liebman and his workforce of 80 workers have designed an app that can be utilized by the illiterate. As an alternative of phrases, customers can observe color-coded prompts to finish a transaction. The corporate additionally plans to launch credit score merchandise quickly.
In line with the firm, near one million individuals have downloaded the android app since launch, however Liebman declined to reveal what number of lively customers the firm really has.
Right now, the firm’s core choices embrace the debit card, a pay as you go bank card, Pix (much like Zelle), a financial savings account and even telemedicine visits through a partnership with Dr. Consulta, a network of healthcare clinics all through the nation. The pay as you go bank card is vital as a result of online shops in Brazil don’t settle for debit card purchases.
Along with the perk of ongoing commissions, alt.financial institution has additionally partnered with three main drugstores, permitting their customers to get 5-30% off any merchandise at the shops, together with medicine.
Whereas the firm relies in São Paulo and São Carlos, Liebman and his household are presently based mostly in London as a result of laws round the pandemic.
The funding in alt.financial institution marks USV’s first funding in South America, solidifying a development by different main U.S. buyers akin to Sequoia who solely in the final a number of years have began trying to LatAm for offers.
“The bar was high for our first funding in South America,” stated Union Sq. Ventures associate John Buttrick. “The mix of the alt.financial institution enterprise mannequin and world-class administration workforce enticed us to develop our geographic focus to assist construct the main digital financial institution targeting the 100 million Brazilians who're presently being uncared for by conventional lenders,” he added in a press release.
Source : TechCrunch