Argentine fintech infrastructure startup Geopagos kicks back boot straps with $35M funding round Meczyki.Net

geopagosThe payments infrastructure startup based in Buenos Aires has raised $35 million in a round led by Riverwood Capital.

The financing marks the company’s first institutional funding. Founded in 2013, the Argentine startup operates as a White label infrastructure software provider with the aim of giving businesses the ability to launch financial services.

Today, Geopagos has a presence in 15 Latin American countries and says it facilitates over 150 million transactions with a processed volume of $5 billion per year.

It promises to help companies that want to build and/or scale payment acceptance business “an unmatched time to market” and the possibility to integrate all functions, under the white label modality – acceptance of all payment methods. All transactions, from to visualization, regardless of the method of payment used for collection.

In short, Geopagos feels that it is in an ideal position to be able to serve as a software enabler that can take back existing ones like large banks and launch enablers like fintechs.

really, customers These include large financial institutions, fintechs, retailers and software companies. some of them are customers Santander, BBVA, Itao Fischer, BAC Credomatic, Niubiz and Chile’s Banco Estado.

Simply put, as a fintech infrastructure provider, Geopagos helps its customers to receive and facilitate card payments to thousands of their customers. It charges a software-as-a-service fee based on usage, which the company says “allows for full alignment.”

“If they win, we win,” said Sebastian Nez Castro, CEO and Co-Founder of Geopagos.

In addition to its White Label offering, GeoPagos also provides its own set of Open APIs so that customers can create and manage their own user experiences if they wish. The company also has several software offerings including Tap to Phone, which Nez Castro said “Seeing huge regional interest.”

There is no doubt that Latin America is a large, low-penetration card market – estimated to be 28% versus 63% in the US. This provides ample opportunity for payment infrastructure providers like Geopagos.

The pandemic accelerated the use of digital payment solutions globally, but particularly in Latin America, noted Nunez Castro. Furthermore, in general, the concept of having a market with more than one acquirer opens up the possibility for new actors to emerge in the financial ecosystem, creating more competition and ultimately leading to better, more innovative solutions, he said. .

“In this environment, merchants can now significantly increase their ability to accept payments, as system costs are reduced and they have access to new and improved products, all of which generate greater financial inclusion,” he said. told Meczyki.Net. “In Latin America, all markets are moving towards a more open acquisition model, but each individual country is at different levels of adoption. We continue to see progress in this area with those who adopt the open acquisition model and create a better, more accessible environment for merchants and buyers.”

The concept of Geopagos was actually born in 2012 on Fifth Avenue in Manhattan, when one of its founders walked into an Apple Store and discovered he could pay for purchases with his card through a small device.

He returned to Argentina and explained the idea to him. Some of his associates, who were also fascinated and became his co-founders. The following year, Geopagos was born with the goal of making payment acceptance easier and more accessible through Latin America. Nunez Castro.

Bootstrapped till date, He says that Geopagos is a profitable business, which has Revenue has grown at around 75% CAGR, or compound annual growth rate, over the past three years.

Prior to helping co-found Geopagos, nunez castro He spent more than 14 years as VP and General Manager of Amex’s GNS, LatM division, where he managed card business operations in Latin America, including entering new markets.

Endeavor Catalyst also participated in the financing. The company plans to use its new funding for its T. to continue buildingtechnology infrastructure and expand to other countries in the region, such as Brazil, where it was recently launched. It is on a mission to triple the number of merchant transactions by 2024.

My Weekly Fintech Newsletter, The Interchange, Launches May 1st! Sign up Here to receive in your inbox.

Geopagos has approximately 350 employees, mostly in IT/tech roles, according to Nez Castro, and hired over 100 people in the last year alone.

Francisco lvarez-Demalde, co-founder and managing partner of Riverwood Capital, said his firm has for years been focused on developing and investing in relationships with fintech infrastructure companies, reflecting the continued technology adoption trends in fintech globally. are behind. ,

“In particular, Latin America has historically been quite low on payment card adoption. This is an endemic issue that has been partially resolved by the emergence of Neobank on the card issuance/banking side of the equation – over the years With a record amount of funding – but this also requires substantial innovation on the card acceptance side,” he wrote via email.

Giopagos, in Riverwood’s view, powers such innovation — in turn, helping its customers “drive digital inclusion in payments across the region.”

“As global growth investors and active tech investors in Latin America for the past 14+ years, we have identified and evaluated dozens of opportunities in this space,” said Alvarez-Demalde. This investment theme around “Acquiring as a Service” or “Embedded Acquisition” is a rapidly developing area of ​​disruption, and the Geopagos team, platform, business model and regional scale were unique relative to smaller competitors.