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Brazil's neobank Inter closes deal to acquire USEND fintech

With the acquisition, Inter plans to start its financial activities in the US, where, so far, it is present only with its marketplace Inter Shop

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Brazil‘s neobank Inter (ex-Banco Inter) announced on Friday that it has signed an agreement to acquire US-based fintech USEND, which operates in the foreign exchange and financial services market, including remittances of money between countries.

With the acquisition, if materialized, Inter plans to start its financial activities in the US, expanding the offer of financial and non-financial products to the US residents and customers in Brazil, integrating the fintech‘s services to its platform.

The closing of the transaction is subject to the finalization of the respective definitive instruments and other conditions, including regulatory approvals.

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According to the Brazilian neobank, USEND has licenses to act as ‘Money Transmitter’ in more than 40 US states and has a customer base of more than 150,000 customers.

The top executives, led by USEND’s founder and CEO, will remain at the helm of the US operation, ahead of the integration process as well as “expansion into adjacent markets such as credit and securities brokerage, which are in Inter’s plans for the US territory”.

The bank did not inform the value of the transaction.

Although most of USEND’s customers are Brazilians living in the US, Inter CEO João Vitor Menin said, the company will target a broad audience to compete with Chime Financial and SoFi Technologies.

“I think there is room for more banking competition in the US, with fintechs attracting customers from traditional banks,” Menin told Reuters.

Inter is also seeking acquisitions in Europe and Latin America, but to have smaller assets such as fintechs, which operate with a simplified banking licence.

Key executives, including USEND’s founder and CEO, will continue to lead the way ahead of the integration process in the US, as well as “expansion into adjacent markets such as credit and brokerage, which are in Inter’s plans for the US territory”.

Around 2:35pm, Inter units were up 6% at BRL 71.18, the second highest on the Ibovespa, which was up 1.35%.

In the view of Guide Investimentos analyst Luis Sales, the acquisition is an important step for Inter and should generate important synergies.

READ ALSO: Brazil’s neobank Inter chooses marketplace as key operation to open doors to international expansion

Gaining international markets with Inter Shop

At the end of June, Inter reported 12 million customers, an 18% growth over the previous quarter and double what it had in the same month last year.

Between April and June, the company won 1.9 million accounts, opening about 30,000 per business day. But more than accounts, what matters for Inter is to grow in recurrence and TPV, that is, to make these 12 million customers effectively use the app daily.

That’s where another important arm of the company comes in: Inter Shop, Inter’s marketplace. According to the company, BRL 774 million were transacted in the marketplace, a growth of 531% over the same period last year.

READ ALSO: Brazil has 200 million digital accounts and a challenge: how to make them actually used

The number of sales made by Inter Shop also grew, or rather tripled, to 5.2 million. In the second quarter, the company managed to attract 423 thousand of its users to Inter Shop. In all, Inter’s marketplace already has 2.1 million active customers.

Inter Shop is not only the company’s biggest bet to leave the term “bank” behind but also to win international markets. The latest operation to be launched by the company in Brazil, it was also the first one chosen to carry the Inter banner worldwide. At the end of March, the Inter Shop platform arrived in the United States.

READ ALSO: Inter’s COO: “We are navigating the best of both worlds, the intersection between fintech and bank”

Users, who, like in Brazilian e-commerce, do not need to be account holders of Inter to shop on the platform, already have access to brands such as Macy’s, Best Buy, Wish, and AliExpress. The cashback from the purchases is deposited by Inter, in dollars, in the account of any bank in the American territory.

With stints in technology companies like TOTVS, Stefanini, and UOL Host, the executive Silvia Blas is the one who will monitor the venture of Inter in the US.