Per Felipe Marques and Vinicius Andrade
THE Fidelity Investments bought a stake in credits, valuing the Brazilian fintech at 4.8 billion dollars (about 26.4 billion reais at the exchange rate of Monday, the 24th). The announcement was made this morning, the 25th.
Creditas raised $260 million in a Series F round that was led by Fidelity, said Sergio Furio, founder and executive director of Creditas. Other shareholders, such as funds SoftBank Vision and Latin Americaalso followed the round, according to Furio.
“The market was getting a little weird and we wanted to be well capitalized,” Furio said in a video interview. He hopes to take advantage of market volatility throughout 2022 for potential new acquisitions.
Fidelity is an investment giant in the United States, with around 40 million individual investors and $11.1 trillion in assets under management.
Follow the biggest event in Latin America on cryptoassets, blockchain, NFTs and much more
Proceeds from the round will also be used to expand Creditas’ customer base with the aim of doubling revenue in 2022, Furio said. The startup faces a difficult year in Brazil, with an economy that is not expected to grow and a polarized presidential election in October.
“Brazilians will have to take out more secured loans, as incumbent banks will pull back on offering other lines of credit,” Furio said.
Creditas offers a range of secured loans, using homes, vehicles and even iPhones as collateral — at lower rates than traditional banks. In a previous fundraising round in December 2020, the company had been valued at $1.75 billion. That is, the appreciation was 175% in just over a year.
The Creditas transaction kicks off what promises to be another strong year for Latin American startups. Last year, companies and investment funds venture capital invested more than $15 billion in startups in the region, more than three times the amount in 2020, according to data compiled by PitchBook.
The business frenzy has helped create new billionaires and turned startups into some of the biggest companies in the region.
The most recent fundraising placed Creditas among the five most valuable privately held startups in the region. For comparison, used car digital dealer kavakfrom Mexico, is valued at 8.7 billion dollars, the Colombian rappiat 5.25 billion dollars, and the Brazilian Fifth floorat 5.1 billion dollars.
The question now is how these startups will fare when they consider the time has come to tap into the public . Due to the decline in the shares of technology companies around the world, the Nubank (NU)which went public last December, is now trading below its IPO.
Creditas plans to make an initial public offering at some point, likely an American one, according to Furio, but there is no set timeframe yet. The new round postpones this moment, as the company is capitalized for a few more months.
growth in Mexico
Furio, who is Spanish, founded Creditas in 2012 after hearing from his then Brazilian girlfriend about Brazil’s astronomical interest rates. He had previously worked in Deutsche Bank’s corporate banking and investment banking division, followed by a seven-year stint at The Boston Consulting Group, and arrived in Brazil without speaking Portuguese.
Now the company he created has more than 4,000 employees, with a technology office in Spain and a loan operation in Mexico. Creditas plans to use part of the proceeds from the round to accelerate growth in Mexico, but there are currently no plans to expand to other Latin American countries.
Including the recent round, Creditas has raised $829 million through equity transactions, according to Furio. In addition to Fidelity, other new investors include the Actyus fund and Greentrail Capital.
The company is also supported by QED Investors, Kaszek Ventures, Wellington Management and Advent International, through its affiliate Sunley House Capital.
“Creditas is the rare fintech that truly builds deep relationships with its customers, dramatically reducing the cost of credit and improving the quality of life for those they serve,” said Will Pruett, director of Fidelity.