Bloomberg Línea — One of Israel’s fastest-growing technology companies, Rapyd is looking to establish its footprint in Latin America’s largest economy, Brazil, through an acquisition. The fintech is Israel’s most valuable startup, worth $15 billion. Rapyd is backed by the world’s largest investment firm BlackRock, Brazil’s Creditas investor Fidelity, General Catalyst, Target Global, and Spark Capital.
Earlier this year, the digital payments company told Bloomberg News that it expected the US to account for 20% of its expected revenue of up to $620 million this year, and it was in talks to acquire a company in the US ahead of a planned IPO. The idea was to acquire a firm in the country to lure investors to participate in the company’s US stock debut and avoid a home bias, according to what the CEO Arik Shtilman told Bloomberg News in February. “I don’t want to explain to a pension fund looking to invest in my IPO what I’m doing in Brazil,” Shtilman said at the time. “Just explaining to Americans where Brazil is on the map is complicated enough.”
Now, as the IPO window seems more difficult and the macroeconomic conditions are clashing fintechs’ valuations worldwide, the cross-border payments provider is for sure looking to Brazil as a “highest priority”, according to Ximena Azcuy, director of network partnerships and business development in the Americas of Rapyd. “Acquisition is our highest priority in Brazil, which is in the top three markets in the minds of senior leadership,” she said, in an interview with Bloomberg Línea.“At this point, the corridor of LatAm is contributing a lot with the transaction process volume of Rapyd overall. We see LatAm as one of the most relevant corridors for the company,” she said, even though she didn’t disclose the percentage Latin America is expected to account on the fintech’s revenue.
Rapyd defines itself as a global fintech as a service company that unifies about 900 payment methods around the world and global payouts in over 200 countries.
“The difference is that Rapyd does not only incorporate global payment methods, we also implement local payment methods in each country as well,” she says. That is also Brazil’s Advent-backed fintech Ebanx’s business, in a market where not only global players such as Stripe are looking at, but also local ones, like Uruguay’s recently-listed unicorn dLocal.
Headquartered in Tel Aviv, Azcuy says Rapyd global expansions started in 2015, when it started its presence in EMEA (Europe, Middle East, and Africa) and the Americas, in 2018. “We have been in this region for several years. The difference is that in 2022 our network has grown a lot; we have incorporated many types of payments.”
The firm says in 2018 it had nearly 30 employees. In 2020 it had over 250 people in the US. and U.K, Australia, Brazil, and Iceland. Now, the company has over 600 employees in markets across EMEA, Asia, and Pacific, and in the Americas, where Rapyd has an office in Mexico, and most of the team is based in the US. It is set to establish an office in Brazil through the acquisition.
“When it comes to M&A there are a lot of criteria, the size of the company, the potential cost if it’s something that overlaps with Rapyd. We are analyzing M&A beyond thinking if the size is small, medium, or large. The more interesting piece is what this company adds to the Rapyd platform.”
Besides the M&A, Rapyd also has an investment arm created last year, Rapyd Ventures, through which it intends to invest in early-stage companies in Brazil. The company operates in all the regions, except Venezuela.
Foreign companies interest in fintechs in LatAm
The interest of foreign companies looking to acquire and invest in Latin America has not backed down in the face of macro issues and rising interest rates. Besides Rapyd, last week, the Seychelles-based cryptocurrency exchange Huobi Global announced the acquisition of Bitex, a regional cryptocurrency exchange in Latin America, as it moves to expand its presence in the region. The terms of the agreement were not disclosed.
Founded in 2014, Mercado Bitcoin’s rival Bitex has a presence in Argentina, Chile, Paraguay and Uruguay. Huobi Global plans to integrate Bitex exchange operations with the Huobi Global platform, allowing users in Latin America to trade digital assets on Huobi Global to compete with China’s Binance.
Huobi Group marked its first foray into Latin America with the launch of Huobi Argentina in 2019, attracted by the growing demand for cryptocurrency-related products and services in the market. In 2020, Huobi Argentina introduced fiat-crypto pairing between the Argentine peso and Bitcoin (BTC) and Tether (USDT).
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