Fintech

Visa acquires Brazilian fintech startup Pismo in $1B blockbuster deal

Comment

Image Credits: Pismo

Credit card giant Visa is acquiring Brazilian payments infrastructure startup Pismo for $1 billion in cash in what is likely one of the largest fintech M&A deals taking place this year so far.

Founded in 2016 by Juliana Motta (CPO), Ricardo Josua (CEO), Daniela Binatti (CTO), and Marcelo Parise (VP of engineering), São Paulo–based Pismo has quietly racked up a list of big-name customers, including Citi, Itaú (one of Brazil’s largest banks), Revolut, N26, Nubank and Cora. The startup processes almost 50 billion API calls and $40 billion in transaction volumes annually, and powers almost 80 million accounts and over 40 million issued cards.

For some context of the explosive growth Pismo has seen, at the beginning of 2021, it was doing less than $1 billion per month in transaction volume, according to Josua. It ended 2020 with fewer than 10 million accounts total.

Over time, Pismo has expanded out of its home country and now also operates in several countries across Latin America, including Mexico and Chile, as well as in the U.S. and Europe. The startup also has some customers in India, Southeast Asia and Australia.

Pismo’s cloud-native issuer processing and core banking platform is aimed at giving banks, fintechs and other financial institutions “flexibility and agility,” the company shared when it raised $108 million in Series B funding in October of 2021. It does things like allow customers to launch products for cards and payments, digital banking, digital wallets and marketplaces. Pismo also claims to allow financial institutions to “take charge of their core data and use it intelligently.”

In a written statement, Visa said that by acquiring Pismo, it “will be positioned to provide core banking and issuer processing capabilities across debit, prepaid, credit and commercial cards for clients via cloud native APIs.” The startup’s platform will also enable Visa to provide support and connectivity for emerging payment rails, like Pix in Brazil, for financial institution clients, the company added.

“Through the acquisition of Pismo, Visa can better serve our financial institution and fintech clients with more differentiated issuer solutions they can offer their customers,” said Jack Forestell, Visa’s chief product and strategy officer, in a written statement. The deal, which is subject to regulatory approvals and other customary closing conditions, is slated to close by year’s end. Pismo will retain its current management team, who will remain based in São Paulo.

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

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

In a written statement, Josua said: “At Pismo, we aim to enable our clients to launch cutting-edge payments and banking products within a single cloud-native platform — regardless of rails, geography or currency. Visa provides us unrivaled support to expand our footprint globally and help shape a new era for banking and payments.”

Visa was reportedly just one of several companies bidding for the startup, which was not seeking to be acquired, or even fundraising, according to Choi.

“Pismo wasn’t on the block,” he told TechCrunch. Besides the transaction representing “one of the largest LatAm cross-border fintech deals that has happened,” Choi believes it is also “an example of a global card network deciding that they would like to get closer to the banks and the financial institutions they work with by providing core banking and card issuing services to them, in addition to their credit card and debit card rails.”

He added: “There are a lot of synergies to be able to sell these really critical APIs to their existing financial institution customers.”

It’s not the first infrastructure play on Visa’s part. In March 2022, it closed on its $2.15 billion acquisition of Tink, a leading fintech startup in Europe focused on open banking application programming interfaces.

The credit card behemoth also famously abandoned its planned $5.3 billion acquisition of Plaid, a U.S.-based popular open banking startup, before having to call off the acquisition after running into a regulatory wall.

No doubt that Pismo getting scooped up by Visa is a coup of sorts for the entire Latin America region, which saw a surge in global investors pouring capital into the region in 2021 and a bit of a retreat since. It’s also a comeback story, considering that in 2019, Pismo was running out of the cash it had raised in a $900,000 seed round in 2016. In fact, things were so dire that Binatti and Parise even sold their only car in order to fund Pismo’s operations. Now the company’s just over 400 workers will become Visa employees.

The deal also marks the second time that Accel has purchased a financial infrastructure company that ended up getting acquired soon after. In 2020, consumer financial services platform SoFi announced that it was acquiring payments and bank account infrastructure company Galileo for $1.2 billion in total cash and stock. That company was founded in 2000 and bootstrapped to profitability before Accel wrote it a $77 million Series A check in 2019.

Want more fintech news in your inbox? Sign up for The Interchange here.

More TechCrunch

The spam reached Bluesky by first crossing over two other decentralized networks: Mastodon and Nostr.

The ‘vote Trump’ spam that hit Bluesky in May came from decentralized rival Nostr

Welcome to TechCrunch Fintech! This week, we’re looking at the continued fallout from Synapse’s bankruptcy, how Layer wants to disrupt SMB accounting, and much more! To get a roundup of…

There’s a real appetite for a fintech alternative to QuickBooks

The company is hoping to produce electricity at $13 per megawatt hour, which would be more than 50% cheaper than traditional onshore wind.

Bill Gates-backed wind startup AirLoom is raising $12M, filings reveal

Generative AI makes stuff up. It can be biased. Sometimes it spits out toxic text. So can it be “safe”? Rick Caccia, the CEO of WitnessAI, believes it can. “Securing…

WitnessAI is building guardrails for generative AI models

It’s not often that you hear about a seed round above $10 million. H, a startup based in Paris and previously known as Holistic AI, has announced a $220 million…

French AI startup H raises $220M seed round

Hey there, Series A to B startups with $35 million or less in funding — we’ve got an exciting opportunity that’s tailor-made for your growth journey! If you’re looking to…

Boost your startup’s growth with a ScaleUp package at TC Disrupt 2024

TikTok is pulling out all the stops to prevent its impending ban in the United States. Aside from initiating legal challenges against the government, that means shaping up its public…

As a U.S. ban looms, TikTok announces a $1M program for socially driven creators

Microsoft wants to put its Copilot everywhere. It’s only a matter of time before Microsoft renames its annual Build developer conference to Microsoft Copilot. Hopefully, some of those upcoming events…

Microsoft’s Power Automate no-code platform adds AI flows

Build is Microsoft’s largest developer conference and of course, it’s all about AI this year. So it’s no surprise that GitHub’s Copilot, GitHub’s “AI pair programming tool,” is taking center…

GitHub Copilot gets extensions

Microsoft wants to make its brand of generative AI more useful for teams — specifically teams across corporations and large enterprise organizations. This morning at its annual Build dev conference,…

Microsoft intros a Copilot for teams

Microsoft’s big focus at this year’s Build conference is generative AI. And to that end, the tech giant announced a series of updates to its platforms for building generative AI-powered…

Microsoft upgrades its AI app-building platforms

The U.K.’s data protection watchdog has closed an almost year-long investigation of Snap’s AI chatbot, My AI — saying it’s satisfied the social media firm has addressed concerns about risks…

UK data protection watchdog ends privacy probe of Snap’s GenAI chatbot, but warns industry

U.S. cell carrier Patriot Mobile experienced a data breach that included subscribers’ personal information, including full names, email addresses, home ZIP codes and account PINs, TechCrunch has learned. Patriot Mobile,…

Conservative cell carrier Patriot Mobile hit by data breach

It’s been three years since Spotify acquired live audio startup Betty Labs, and yet the music streaming service isn’t leveraging the technology to its fullest potential — at least not…

Spotify’s ‘Listening Party’ feature falls short of expectations

Alchemist Accelerator has a new pile of AI-forward companies demoing their wares today, if you care to watch, and the program itself is making some international moves into Tokyo and…

Alchemist’s latest batch puts AI to work as accelerator expands to Tokyo, Doha

“Late Pledge” allows campaign creators to continue collecting money even after the campaign has closed.

Kickstarter now lets you pledge after a campaign closes

Stack AI’s co-founders, Antoni Rosinol and Bernardo Aceituno, were PhD students at MIT wrapping up their degrees in 2022 just as large language models were becoming more mainstream. ChatGPT would…

Stack AI wants to make it easier to build AI-fueled workflows

Pinecone, the vector database startup founded by Edo Liberty, the former head of Amazon’s AI Labs, has long been at the forefront of helping businesses augment large language models (LLMs)…

Pinecone launches its serverless vector database out of preview

Young geothermal energy wells can be like budding prodigies, each brimming with potential to outshine their peers. But like people, most decline with age. In California, for example, the amount…

Special mud helps XGS Energy get more power out of geothermal wells

Featured Article

Sonos finally made some headphones

The market play is clear from the outset: The $449 headphones are firmly targeted at an audience that would otherwise be purchasing the Bose QC Ultra or Apple AirPods Max.

5 hours ago
Sonos finally made some headphones

Adobe says the feature is up to the task, regardless of how complex of a background the object is set against.

Adobe brings Firefly AI-powered Generative Remove to Lightroom

All cars suffer when the mercury drops, but electric vehicles suffer more than most as heaters draw more power and batteries charge more slowly as the liquid electrolyte inside thickens.…

Porsche Ventures invests in battery startup South 8 to boost cold-weather EV performance

Scale AI has raised a $1 billion Series F round from a slew of big-name institutional and corporate investors including Amazon and Meta.

Data-labeling startup Scale AI raises $1B as valuation doubles to $13.8B

The new coalition, Tech Against Scams, will work together to find ways to fight back against the tools used by scammers and to better educate the public against financial scams.

Meta, Match, Coinbase and others team up to fight online fraud and crypto scams

It’s a wrap: European Union lawmakers have given the final approval to set up the bloc’s flagship, risk-based regulations for artificial intelligence.

EU Council gives final nod to set up risk-based regulations for AI

London-based fintech Vitesse has closed a $93 million Series C round of funding led by investment giant KKR.

Vitesse, a payments and treasury management platform for insurers, raises $93M to fuel US expansion

Zen Educate, an online marketplace that connects schools with teachers, has raised $37 million in a Series B round of funding. The raise comes amid a growing teacher shortage crisis…

Zen Educate raises $37M and acquires Aquinas Education as it tries to address the teacher shortage

“When I heard the released demo, I was shocked, angered and in disbelief that Mr. Altman would pursue a voice that sounded so eerily similar to mine.”

Scarlett Johansson says that OpenAI approached her to use her voice

A new self-driving truck — manufactured by Volvo and loaded with autonomous vehicle tech developed by Aurora Innovation — could be on public highways as early as this summer.  The…

Aurora and Volvo unveil self-driving truck designed for a driverless future

The European venture capital firm raised its fourth fund as fund as climate tech “comes of age.”

ETF Partners raises €285M for climate startups that will be effective quickly — not 20 years down the road