Chinese internet giant Tencent Holdings (00700.HK) has invested in Argentine mobile banking startup Uala, signaling its growing interest in the Latin America fintech market.
Uala revealed the Tencent investment this week without disclosing the actual amount. But the startup’s founder, Pierpaolo Barbieri, told Reuters that the latest deal significantly enhanced his firm’s valuation.
Founded in 2016, Uala raised US$34 million in its Series B round led by Goldman Sachs in October last year. Its other backers include Point72 Ventures of Steve Cohen, family office of George Soros, and Jefferies Group, among others.
With Tencent now taking a stake, Barbieri said his firm aims to collaborate with the Chinese social media-to-gaming behemoth to further develop its app.
“The idea is that it’s not just money. It’s about learning from their experience in China and in other Asian markets to inform our Latin America strategy,” Barbieri told Reuters in a phone interview.
Uala provides a personal financial management mobile app. Its app links with a prepaid Mastercard that allows users to conduct financial transactions such as online or offline purchases, peer-to-peer payments and top-ups, both in Argentina and abroad, free of charge. The app also allows users to track expenses through its analytical tools.
With a mission to bring access to financial services to Latin America, Uala offers more convenient and lower-cost financial services targeting the unbanked population. From October 2017 to December 2018, it has issued over 500,000 prepaid cards to its users, according to Bloomberg.
Barbieri said the Tencent investment is a vote of confidence in Uala and that the funding will help the startup accelerate its expansion in users and service offerings.
According to him, Tencent had approached his firm and that he had traveled to China to meet with the Chinese group’s senior executives in recent months.
“Tencent invests because it’s betting on what will happen in Argentina over the next 10 years, rather than what will happen in the next six months,” Barbieri told Bloomberg.
Tencent began its startup investment in Latin America with a US$180 million capital injection to Nubank, a Brazilian financial technology firm that mainly offers fee-free credit cards and digital payment accounts, serving 5 million credit card holders.
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