(Reuters) -Payments giant Visa Inc said on Wednesday it would acquire Brazilian fintech platform Pismo for $1 billion in cash to expand its footprint in Latin America as the region continues to attract scores of foreign investments.
Pismo will retain its current management team and the deal is expected to close by the end of 2023, Visa said.
The consolidation also expands Sao Paulo-based Pismo’s offerings. It provides technology through which clients can issue Visa and Mastercard cards.
For Visa, the world’s largest payments processor, joining forces with Pismo is the first major consolidation since 2021 when it signed a deal to buy European open banking platform Tink for $2.2 billion and also agreed to buy British cross-border payments provider Currencycloud.
Pismo’s cloud-based platform for financial institutions hosts more than 70 million accounts and transacts more than $200 billion a year.
The seven-year-old company was founded by entrepreneurs Ricardo Josua, Daniela Binatti, Juliana Binatti and Marcelo Parise. It now has operations in Europe, North America, Southeast Asia, India and Latam.
Pismo raised $108 million in a Series B investment round in 2021 led by Japan’s SoftBank Group Corp, Amazon.com Inc and global venture capital firm Accel.
The deal with Pismo also underscores the growing importance of Latin America as a strategically sound investment after it produced a spate of high-growth companies, most notably Nubank.
Nubank’s successful flotation helped more than 1,300 startups in Latin America rake in an estimated $28.17 billion in funding in 2022, according to the Association for Private Capital Investment in Latin America.
Still, Latin American startups often complain that banks in the region lack the support they need. Tech startups in the region also struggled to find banking alternatives after the implosion of tech lender Silicon Valley Bank in March.
(Reporting by Jaiveer Shekhawat and Mehnaz Yasmin in Bengaluru; Editing by Maju Samuel)
