Swap, Latam’s fintech factory, raises $25 million Series A led by Tiger Global

October 28, 2021
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Founded in 2018 by former 99 employees, the startup offers financial infrastructure services to other companies.

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With its proposal to be a "fintech factory" in the Brazilian market, the Brazilian Swap attracted a contribution of R$ 135 million (US$ 24M). The series A investment round was led by Tiger Global and had the participation of funds OneVC, GFC and Flourish (which already invested in the company), as well as angel investors Justin Mateen (founder of Tinder) and Rahul Mehta (managing partner of DST Global). Until then, the company had raised R$17 million.

Founded in 2018 by entrepreneurs Douglas Storf, Ury Rappaport and Alexandre Takinami, Swap began offering to other fintechs and Brazilian digital banks a prepaid card issuance and processing service. Over the last year, the company has expanded its operations, offering client companies the possibility of entering the flexible benefits and credit market.

The new products helped the company attract customers such as fintechs OpenCo, Vee and Valuu, increasing its base by 300% in the last year. Revenue also grew: according to President Douglas Storf, sales doubled every quarter and processed volume grew 30% a month in the last semester.

With the resources of the new round, Swap will be able to invest in hiring more employees to support its expansion and the launch of new verticals. Today, there are 60 people and the goal is to reach at least 100 by the end of the year. "In the corporate market, we need a more experienced sales and operation team, not least because we work with sensitive operations, of great investment for companies", says the founder.

For Alex Cook, a partner at Tiger Global, fintech has the potential to help Latin America spread the technology within the financial market - the fund is an investor in some giants in the infrastructure area, such as Marqeta, Stripe and Checkout.

“Swap is building a modern card issuance platform and banking infrastructure for the next generation of financial services companies in Brazil, enabling cost savings and improving experiences for consumers and businesses. We are excited about the partnership”, he said in a statement.

Business trajectory

Founded in 2018 by Douglas Storf and Ury Rappaport, Swap was born out of a perception the partners had while still working together in the payments area of ​​the 99 mobility app. The pair realized how difficult it was for a company outside the financial sector to venture into this segment, but noticed that it was the trend in the technology market.

At the time, iFood, Loggi and Gympass were trying to get their own financial products out of the paper. "It was evident that there was an opportunity in the market," says Storf. At the end of 2018, then, entrepreneurs left 99 to create the Swap. To help them on the technology front, they invited Alexandre Takinami, former software engineer at Guiabolso, to co-found the business.

At the time the startup was launched, the concept of bank as a service (or "bank as a service" in Portuguese) was being born. "Nobody really understood what payment infrastructure was," recalls Rappaport.

Today, after Pix and open banking opened up, "fintech factories" are better known and attract millions in investment. Just last week, Brazilian Hash received a contribution of R$ 235 million led by QED Investors and Kaszek funds, and Argentine Pomelo raised R$ 190 million with funds such as Tiger, Sequoia and Monashees. While it is not clear what the use cases of the new financial system tools will be, investors choose to bet on businesses that will build the infrastructure for others.

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.

With its proposal to be a "fintech factory" in the Brazilian market, the Brazilian Swap attracted a contribution of R$ 135 million (US$ 24M). The series A investment round was led by Tiger Global and had the participation of funds OneVC, GFC and Flourish (which already invested in the company), as well as angel investors Justin Mateen (founder of Tinder) and Rahul Mehta (managing partner of DST Global). Until then, the company had raised R$17 million.

Founded in 2018 by entrepreneurs Douglas Storf, Ury Rappaport and Alexandre Takinami, Swap began offering to other fintechs and Brazilian digital banks a prepaid card issuance and processing service. Over the last year, the company has expanded its operations, offering client companies the possibility of entering the flexible benefits and credit market.

The new products helped the company attract customers such as fintechs OpenCo, Vee and Valuu, increasing its base by 300% in the last year. Revenue also grew: according to President Douglas Storf, sales doubled every quarter and processed volume grew 30% a month in the last semester.

With the resources of the new round, Swap will be able to invest in hiring more employees to support its expansion and the launch of new verticals. Today, there are 60 people and the goal is to reach at least 100 by the end of the year. "In the corporate market, we need a more experienced sales and operation team, not least because we work with sensitive operations, of great investment for companies", says the founder.

For Alex Cook, a partner at Tiger Global, fintech has the potential to help Latin America spread the technology within the financial market - the fund is an investor in some giants in the infrastructure area, such as Marqeta, Stripe and Checkout.

“Swap is building a modern card issuance platform and banking infrastructure for the next generation of financial services companies in Brazil, enabling cost savings and improving experiences for consumers and businesses. We are excited about the partnership”, he said in a statement.

Business trajectory

Founded in 2018 by Douglas Storf and Ury Rappaport, Swap was born out of a perception the partners had while still working together in the payments area of ​​the 99 mobility app. The pair realized how difficult it was for a company outside the financial sector to venture into this segment, but noticed that it was the trend in the technology market.

At the time, iFood, Loggi and Gympass were trying to get their own financial products out of the paper. "It was evident that there was an opportunity in the market," says Storf. At the end of 2018, then, entrepreneurs left 99 to create the Swap. To help them on the technology front, they invited Alexandre Takinami, former software engineer at Guiabolso, to co-found the business.

At the time the startup was launched, the concept of bank as a service (or "bank as a service" in Portuguese) was being born. "Nobody really understood what payment infrastructure was," recalls Rappaport.

Today, after Pix and open banking opened up, "fintech factories" are better known and attract millions in investment. Just last week, Brazilian Hash received a contribution of R$ 235 million led by QED Investors and Kaszek funds, and Argentine Pomelo raised R$ 190 million with funds such as Tiger, Sequoia and Monashees. While it is not clear what the use cases of the new financial system tools will be, investors choose to bet on businesses that will build the infrastructure for others.

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.
Hub Ranking:
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43
País de origen:
Headquarters:
CDMX
Monto inversión:
24
M
Ronda financiación:
Series A
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