It is clear that fintech has seen a boom in recent years. We have seen an increase in funding for companies that provide infrastructure to financial institutions and fintechs, which has allowed them to grow faster and be more competitive.
Pismo, a Pismo-based infrastructure provider, is located in Paulo. Today, SoftBank led a Series B financing round that saw the startup raise $108 million. The financing included strong participation by Silicon Valley-based venture firm Accel and e-commerce giant Amazon, as well as existing backers Redpoint Eventures and Headline. Pismo now has $118 million in total funding.
It is noteworthy that Amazon has made an investment in a LatAm infrastructure provider to the financial services sector. Amazon is clearly investing in Latin America and is now thinking about how the infrastructure and payment options will be used by customers of its services.
Pismo was founded in 2016 and has since accumulated a large list of high-profile customers including Banco Ita (one the largest Brazilian banks), BTG. Cora, N26, Falabella, N26, N26, and Banco Ita. The platform hosts over 30 million accounts and handles more than 4 Billion API calls per month. This equates to more than $3.5 billion in monthly transaction volume. Ricardo Josua, CEO, said that the company was doing less than $1 million per month in transaction volume at the start of 2019. It had less than 10,000,000 accounts at the end of 2020. It is growing rapidly, adding approximately 2.5 million accounts each month.
Pismo is a SaaS company that charges transaction fees. Pismo charges per active account so prices will decrease depending on the volume. This means that the customer will pay less per account for more customers.
Josua stated that Pismos, a cloud-native core processor platform, is designed to give banks, fintechs, and other financial institutions flexibility, and agility. It allows customers to launch products for card and payment, digital banking, digital wallets, and marketplaces. Pismo claims that it will allow financial institutions to manage their core data and make intelligent use of it.
Josua stated that we are here to assist these institutions in not being constrained and to be ready for the next generation payments and banking services.
The company has had great success in LatAm and plans to use the new capital to expand beyond the region. It also plans to use the capital to develop technologies for financial market infrastructure, banking, payments, and other services. Pismo has already established relationships with customers in Asia, and plans to open offices in the United States (in Austin Texas) as well as in the United Kingdom (in Bristol).
Josua stated that all our major competitors are international players.
It plans to also invest in go-to market strategy and sales. Josua says that it has made investments with little or no marketing effort and no sales team.
Pismo appointed Vishal Dalal, a former McKinsey partner to be its global CEO. Josua has a long history in the financial sector. He founded Conductor, now Dock. It is widely believed to be LatAm's first payment-as-a service platform. Former executives from that company joined him in Pismo.
The Brazilian central bank launched an instant payment system one year ago. Josua said that banks and fintechs were in panic mode. We had the technology in place for this new generation so we were ready. Institutions were able implement it without writing a line of code. We believe it is an easy product that will spread all over the world, even in the U.S.
Pismo plans to hire more engineers, which is not surprising considering it has more than 200. Pismo has grown from 40 employees in March 2020 to over 250 employees today, with 85% of them being technical talent.
Pismo is not a Fintech company or a BaaS firm. Josua prefers techfin to describe the startup's activities.
He said that we are a technology company in the first place. We also provide infrastructure for BaaS businesses. Five of our clients offer BaaS solutions for their customers.
The company's potential is being viewed positively by its investors, not only in LatAm, but worldwide.
Alex Szapiro is the head of Brazil at SoftBank and an operating partner. He considers Pismo a company that has developed a world-class technology capable of solving many problems in finance in a highly scalable way.
Pismo is being used by some of the most important banks and FIs in LATAM, not only for digital attacks but also for core products. It has replaced outdated legacy providers, he said via email. Some of the most advanced fintechs are also leveraging their technology to enhance their products.
Szapiro believes Pismo is unique in that it is a neocore platform that has already run large-scale operations for financial institution.
He said that the founders are exceptional and have high ambitions to make Pismo an internationally recognized company.
Ethan Choi, Accel partner, said that his firm was searching for the Galileo for LatAm and came across Pismo. (Accel invested in Galileo in the beginning of 2019, before SoFi bought it in October 2019.
He said that Accel was specifically looking for a company to provide the core infrastructure for fintechs, but also one that understands the nuances of local markets' banking ecosystem.
Accel and a founding team who had contributed to building Pismo's Gen1 version are both found in Pismo.
Choi stated that we knew it had to be an API-first platform and cloud-based when we looked. That's exactly what Pismo does. It is the strongest platform of its type we have seen in the region and the most robust we have ever seen globally. It can do everything a fintech could need.
