PayU, the Prosus-controlled fintech company with operations in more than 50 countries – it has been described as the PayPal of emerging markets – today announced a dual deal to expand its presence in Latin America. The company acquired Ding, a platform that allows people to remotely top up mobile phone credit for others; and he led a $46 million investment in Treinta, a financial “super app” for small businesses. Ding has 300,000 monthly active users transferring around $10 million per month; and Y Combinator alum Treinta, which launched just 18 months ago, has 4 million customers.
Notably, both are based in Colombia but provide services throughout the Latin America region (and in Ding’s case, the world). For PayU and Prosus, deals are important for two main reasons:
First, they help Prosus tap into what continues to be a rapidly growing market. The company cites figures from the U.S. Department of Commerce that estimate that Colombia alone has the fifth-largest e-commerce market in Latin America, which as a region is expected to reach 260.2 million digital shoppers. by the end of 2022, surpassing the United States, with $167.81 billion in purchases.
Second, this decision shows how PayU and Prosus seek to further diversify their investment base. It’s an interesting development given its proximity to Prosus rethinking investments in other regions, particularly the currently pariah Russian state, including a $770 million writedown in March of its investment in social network VK .
“Our recent activity in Colombia reflects PayUto provide seamless online and cross-border transactions for merchants and consumers,” said Mario Shiliashki, Global CEO of PayUof the payments division, in a press release. “These are just two examples of how we provide useful products and services to millions of people in their daily lives. PayU has helped facilitate the evolution of online payments in Colombia since 2011 and we are proud to expand our services to promote financial inclusion for SMEs in Colombia and around the world.
Digging into individual transactions, Ding is the trading name of Tecnipagos, which was itself a spin-off of CredibanCo, a payment service provider in the country that has been around for 50 years. It appears that Ding never had any outside funding before being separated and picked up.
Financial terms of the Ding acquisition – which were first announced earlier this month, ahead of its closing – are not made public, but may be in future Prosus financial statements. Prosus itself was listed in 2019 by South African media conglomerate Naspers as a separate public company containing all of the company’s technology activities, which includes PayU and other e-commerce and fintech investments. , as well as a significant stake in Tencent in China. Prosus has a current market capitalization of $152 billion – a figure largely boosted by this Tencent stake.
For some context on the size of what PayU is acquiring, Ding claims to have some 300,000 monthly active users and conducts 30,000 transfers per day totaling approximately $10 million processed each month.
PayU describes Ding as a payment app, but so far it has focused on transfers for one purpose: topping up credit for mobile phones. This is an important activity in itself, and often goes hand in hand with more general remittance services. Mobile phone credit is not just for making calls in emerging markets (phones are becoming a proxy for bank accounts in many developing markets where traditional banking services are expensive or underdeveloped). Often, money sent by friends or family comes in the form of mobile credits. This paves the way for PayU to develop more remittance services around Ding and potentially expand its existing remittance operations to Ding’s customer base.
Treinta’s investment, meanwhile, is a $46 million round with participation also from LionTree Partners, Ethos VC, TEN13 and other undisclosed investors. Treinta had previously participated in a Y Combinator batch, and the company’s backers in its $14.3 million round in 2021 included YC, Levels Up Ventures, Outbound Ventures, Luxor Capital, Mango.vc, Goodwater Capital, Soma Capital, First Check Venture, Houston Angel Network, FJ Labs, Commerce Ventures, Rhombuz Ventures, Acacia Venture Partners and Evening Fund.
Treinta – which means “thirty” in Spanish – is not disclosing its valuation, and PayU also declined to comment on the figure.
The startup has only been around for 18 months and it says it already has some 4 million SME customers in 18 countries.
Treinta itself is tapping into two trends that are currently important in fintech. The first involves a wave of fintech companies building “all-in-one” platforms, where customers can come for a specific service – financing, billing or checking account services, for example – and are sold to related offerings. , which themselves are built around a larger dataset that fintech is building on that particular client. These services often bring behind-the-scenes technologies from third parties, using APIs to integrate these white-label products and brand them as their own.
The second is Treinta’s focus on small business – a cornerstone of the global economy, but one that has historically been underserved by technology. Treinta estimates that there are around 50 million small businesses (he describes them as “micro-businesses”) in Latin America, of which around 90% have not yet adopted technology to manage their finances, so it’s a big potential market.
PayU, as a provider and builder of fintech solutions, will be able to leverage Treinta as a channel to deepen its own customer-facing technology in the market in Colombia and the rest of Latin America, but Treinta will also become another sales channel. retail for PayU’s Technology Under the Hood.
“By acquiring and investing in companies like Ding and Treinta, global and local SMEs are able to expand their businesses within LatAm, providing the best payment service with the consumer experience in mind” , said Francisco León, PayU‘s CEO for Latin America, in a statement. “We are excited to expand the reach of Treinta and Ding’s innovative solutions, especially as these services are fully aligned with our strategic goal of creating a world without financial borders. »
While much of PayU’s activity has taken place in Asia and emerging markets in Europe, Latin America will, it seems, be a priority in the coming months. A spokesperson tells us that PayU plans to make new investments in the region this year.