Brazil‘s fintech startup Conta Simples is making venture capital money go round. After making its first investment in a startup, media tech Startups, the company announced on Thursday the fundraising of $21.5 million (BRL 121.4 million) from the JAM fund, of Tinder founder Justin Mateen, who has already invested in one of the companies that inspired Conta Simples, the U.S. firm Brex. Valor Capital, Base10 Partners, Y Combinator, Quartz, and Big Bets also participated in the round.
The new round comes six months after the fintech received BRL 28 million from US accelerator Y Combinator. The thesis that fintech is “the Nubank of small businesses” has caught on in the market. Before even seeking investment, Conta Simples received four term sheets from investors in a fortnight. “The hardest part of the round was to accommodate everyone, one reduced his participation here, another there, in the end, it all worked out,” said the CEO and co-founder of fintech, Rodrigo Tognini.
In recent months, several Latin American fintechs with little time in operation have announced large rounds or even consecutive rounds, very close to each other. “We were discussing that we will get investor pressure to go along those lines. Like, you have a client with less traction than you raising a lot more at larger valuation,” Tognini pondered.
The round will be applied to the product and team growth, tripling the number of employees to 450. Tognini explains that the company wants to launch an expense management feature allied to financial products.
Another part of the round will be used in marketing to attract customers. “We calibrate a little bit more to have bigger customer conversions with assertiveness, customers who will leave more revenue on the table,” he points out. Acquisition of companies, as well as investment in other startups, is also not out of the question, according to the CEO, although it is not the main focus at the moment.
Focus on corporate cards in Brazil
Conta Simples has a platform that offers corporate cards and digital accounts to small and medium-sized companies. The fintech said it has tripled its monthly revenue compared to December 2020, but did not reveal how much exactly.
“Our mission is to unlock the maximum potential of businesses through smart financial systems. We don’t want to give just a no-cost product, we have to bring products that bring efficiency to them, regarding payroll, accountant, accounts payable, and refund system.”
The startup is remunerated by the interchange fee (the transaction fee) as the platform is free. Conta Simples wants to end 2022 transacting BRL 4.5 billion, which, according to Tognini, reinforces the idea of the client who brings revenue, who does not open an account “just for the sake of opening it”.
The startup is still in the process of obtaining a Direct Credit Society license with the Central Bank. With the new license, it will be able to offer new credit products – issuing credit cards – complementing the payment services already offered and depending less on partners.
Today, the fintech has 37,000 customers and aims to reach 200,000 by the end of 2022 in Brazil alone. “When it comes to banking, there is a regulatory barrier. So we decided to focus on Brazil because each country has a regulator and this causes us to end up losing focus. With the size of Brazil, the market is still too big for us not to focus 100% on it”, says Tognini.