🏎 Reserva tu cupo para el entrenamiento más completo en Open Finance y Pagos Inmediatos de Latam. Inscríbete a nuestro Fellowship
Por favor verifica tu e-mail para tener acceso completo al Hub haciendo click al link enviado a youremail@gmail.com
Reenviar correo de verificación

Open Co merges with BizCapital in strategy to better navigate credit market in Brazil

June 22, 2023
Por
Pipeline Valor
Pipeline Valor
Here, you will find news, analysis and behind the scenes of the market.
📷
IBRE
Fintechs add R$ 5 billion (USD$104M) in unsecured credit operations for individuals and SMEs
Contenido para Usuarios 🔒

One of the pioneers in unsecured lending for individuals in the country, Open Co (formerly Geru) has just announced a merger with BizCapital. The transaction marks the fintech's entry into B2B and consolidates a group now with R$ 5 billion in originated operations, in a strategy to better navigate an especially challenging scenario for the credit market. The deal was effected without involving financial capital, with the exchange of stakes.

"As we were never direct competitors, this flirtation had been going on for some time. I have followed Biz closely since its foundation, and have even been part of its board. We are the siblings separated in the maternity ward," jokes Sandro Reiss, CEO of Open Co. But as much as the operations were naturally complementary, the conversations required a good deal of planning on the part of the duo until a consensus was reached that it was the best time to unite operations, says Francisco Ferreira, founder of BizCapital. "The timing now is very good."

Open Co itself was born out of a merger in 2021, between Geru and Rebel, and has been expanding its operations via M&A. The fintech incorporated, late last year, BoletoFlex and its buy now pay later (BNPL) solution, the American version of the old crediário. Now, with the entry of BizCapital, it is starting to attend small and medium entrepreneurs in a more structured way - about 20% of the company's portfolio already supported incipient businesses, but via loans in the name of the contractor's founder.

Open Co serves about 10 million individuals, while BizCapital brings about one million SMEs to the customer base. With 20 million active small businesses in the country, there is great room for growth in the segment. The CEO remains Reiss, while his partner Rafael Pereira holds the COO position. BizCapital co-founders Ferreira and Cristiano Rocha coordinate the product area, as CTO and CRO, respectively. The brand will be maintained.

"Today there is a natural tendency for SMEs to search for credit in an integrated way, precisely because of the absurd gap that exists in the market," says Ferreira. "I think we are on our way to having more and more solutions for this public, even more so with Brazil going through regulatory and technological advances to make credit cheaper."

Together, Open Co and BizCapital have raised about $190 million in equity, with the most recent round being a December 2021 contribution from Softbank to the fintech for individuals. The two fintechs already had some shareholders in common, such as Chromo Invest and Monashees. XP Asset, IFC and LTS, a fund owned by Jorge Paulo Lemann, Marcel Telles and Beto Sicupira, will remain among the main shareholders.

While high interest rates dry up venture capital liquidity and make fundraising more challenging, Open's executives guarantee to be in a comfortable financial position with the monetization of its customer base, even though the business continues to burn cash as a strategic decision.

"The recent market cycle is not one of growth, there are high interest rates, defaults, and we have always financed ourselves via capital markets. But we have a proven business, highly scalable, and a strong active client base. Our short-term plans are more about continuing to invest to improve the product portfolio and strengthen relationships with partners," explains Reiss.
Las opiniones compartidas y expresadas por los analistas son libres e independientes, y de ellas son responsables sus autores. No reflejan ni comprometen el pensamiento u opinión de Latam Fintech Hub, por lo cual no pueden ser interpretadas como recomendaciones emitidas por la platafomra. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista sobre el ecosistema Fintech.

One of the pioneers in unsecured lending for individuals in the country, Open Co (formerly Geru) has just announced a merger with BizCapital. The transaction marks the fintech's entry into B2B and consolidates a group now with R$ 5 billion in originated operations, in a strategy to better navigate an especially challenging scenario for the credit market. The deal was effected without involving financial capital, with the exchange of stakes.

"As we were never direct competitors, this flirtation had been going on for some time. I have followed Biz closely since its foundation, and have even been part of its board. We are the siblings separated in the maternity ward," jokes Sandro Reiss, CEO of Open Co. But as much as the operations were naturally complementary, the conversations required a good deal of planning on the part of the duo until a consensus was reached that it was the best time to unite operations, says Francisco Ferreira, founder of BizCapital. "The timing now is very good."

Open Co itself was born out of a merger in 2021, between Geru and Rebel, and has been expanding its operations via M&A. The fintech incorporated, late last year, BoletoFlex and its buy now pay later (BNPL) solution, the American version of the old crediário. Now, with the entry of BizCapital, it is starting to attend small and medium entrepreneurs in a more structured way - about 20% of the company's portfolio already supported incipient businesses, but via loans in the name of the contractor's founder.

Open Co serves about 10 million individuals, while BizCapital brings about one million SMEs to the customer base. With 20 million active small businesses in the country, there is great room for growth in the segment. The CEO remains Reiss, while his partner Rafael Pereira holds the COO position. BizCapital co-founders Ferreira and Cristiano Rocha coordinate the product area, as CTO and CRO, respectively. The brand will be maintained.

"Today there is a natural tendency for SMEs to search for credit in an integrated way, precisely because of the absurd gap that exists in the market," says Ferreira. "I think we are on our way to having more and more solutions for this public, even more so with Brazil going through regulatory and technological advances to make credit cheaper."

Together, Open Co and BizCapital have raised about $190 million in equity, with the most recent round being a December 2021 contribution from Softbank to the fintech for individuals. The two fintechs already had some shareholders in common, such as Chromo Invest and Monashees. XP Asset, IFC and LTS, a fund owned by Jorge Paulo Lemann, Marcel Telles and Beto Sicupira, will remain among the main shareholders.

While high interest rates dry up venture capital liquidity and make fundraising more challenging, Open's executives guarantee to be in a comfortable financial position with the monetization of its customer base, even though the business continues to burn cash as a strategic decision.

"The recent market cycle is not one of growth, there are high interest rates, defaults, and we have always financed ourselves via capital markets. But we have a proven business, highly scalable, and a strong active client base. Our short-term plans are more about continuing to invest to improve the product portfolio and strengthen relationships with partners," explains Reiss.
Las opiniones compartidas y expresadas por los analistas son libres e independientes, y solamente sus autores son responsables de ellas. No reflejan ni comprometen el pensamiento o la opinión del equipo de Latam Fintech Hub y, por lo tanto, no pueden interpretarse como recomendaciones emitidas por la plataforma. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista en el ecosistema Fintech.

Este contenido es solo para
usuarios Prime 👑 del Hub.

Hacer upgrade ▸
Apoyado por:
Contacta al equipo
Hub Ranking:
#
País de origen:
Headquarters:
São Paulo
Monto inversión:
M
Ronda financiación:
Más novedades

Fintechs en
tendencia del Hub

No items found.

Brasil 🇧🇷

Ecosistema Fintech

Más Insights

Por
Chubb
Chubb
The world's largest publicly traded property and casualty insurance company
Insurtech 🏆

Nuestra comunidad

WHATSAPP
✨ Nuevo!
Tenemos un canal de Whatsapp donde contamos todos los movimientos en la industria.
Usuario pRIME 👑
Acceso ilimitado. Desbloquee la cobertura exclusiva, entrevistas con CEOs, eventos especiales y más.
Activar suscripción
RESUMEN SEMANAL
Todas las semanas envíamos a tu email un resumen con todos los avances en el ecosistema Fintech.
Abrir el Blueprint
Grupo de SLACK
Tenemos un grupo de Slack con todos los miembros registrados del Hub para que sigamos conversando.
uNIRSE AL GRUPO