After two significant acquisitions – the Brazilian BPP and the Mexican Cacao – in the second half of 2021, payments company Dock wants to take the lead in the so-called Banking as a Service in Latin America. The Brazilian fintech is strengthening international teams, opening offices in countries where it already had businesses – Mexico City (Mexico), Lima (Peru), Santiago (Chile), Bogotá (Colombia), and Buenos Aires (Argentina) – and planning its arrival in two others (Quito, in Ecuador, and Santo Domingo, in the Dominican Republic). With more than 63 million active accounts from more than 300 corporate clients, Dock wants to be a means for regional expansion for them too.
Dock has been soft-operating in some of these markets since 2020 and landed in Mexico in August of last year. What has changed since then is that the boom in digitization and fintechs in the region, added to the growing advancements in the regulatory environment, made the company see that it could also be the ideal partner for customers wanting to take the same road.
That’s what Dock’s CEO, Antonio Soares, alongside Gerardo Bonilha, co-founder of Cacao and now Chief Revenue Officer at Dock, said in an interview with LABS. “We see the Mexican and Colombian markets, for example, evolving towards a very similar regulation to what we already have in Brazil. So what we did was adjust what we call a global product, which works the same way in Brazil, Mexico, and other countries. Locally, we have partners [that allow us to operate according to the regulations of each country].”
Directly handling these partnerships now and overseeing launches and regional offices, is the other co-founder and former CEO of Cacao, Jorge Alvarez, in the role of Latin American Expansion Officer. “When we met Dock, we saw a Cacao on steroids,” joked Bonilha, noting that the dreams of both companies, centered on BaaS and financial inclusion, were the same.
Within the basic package that Dock wants to offer every company is services such as card issuing and digital accounts (Cacao’s flagship business) and means of payment (such as transfers and Brazil‘s PIX, BPP’s specialty). But as might be expected, the fintech is developing new products with an eye on what’s next on the central banks’ roadmap. “As the regulatory part progresses, we will adapt, but we know that a lot can be done, including encouraging the regulatory authorities of each country also to innovate. We have already mapped what we will need in each country,” stressed Soares.
In Brazil, Dock is a regulated payment institution and has recently asked the Central Bank to act as a payment initiator, a role that Mercado Pago is already performing. In the future, the company also knows that an exchange license can help it operate services such as remittances and dollar accounts, which in turn are a gateway for anyone starting to work with crypto. “We know that as soon as we launch something in this sense, our customers will innovate on top of it, bringing solutions, for example, to companies that have to pay their Amazon licenses and other software in dollars and do not want to pay IOF [Brazil‘s tax on credit and exchange operations] anymore.”
There is still no payment institution license in Mexico, such as the one in Brazil. So Dock has partners with different permits and is also enabled to operate within Visa and Mastercard card schemes. “In Mexico, as in Brazil, we have customers who use our platform in the Saas model, with their own licenses, and customers who use Dock in the Baas model, through our licenses,” explained Soares. When acquired in December, Cacao had already issued more than 4 million cards in Mexico to more than 50 corporate clients such as Albo, Lanapay, Oyster, and Clip. The idea is that they now will have access to other Dock solutions as well.
Dock’s path until now
Processing more than $50 billion annually — more than double what it processed at the start of 2021 — Dock has been standing on its own two feet since its founding in 1995.
The company was born offering private label cards to retailers, but in 2014, when it was acquired by private equity manager Riverwood Capital and Soares himself, it began to expand its services. In 2018, it raised an investment with Visa, which, according to Soares, was relevant not for the capital itself but the fintech‘s entry into Visa’s network, allowing the launch of the company’s first banking-as-a-service platform. Then, in early 2020, the company acquired Muxi, a provider of solutions for capturing transactions at points of sale.
The $150 million round that came in the second half of that year led by Viking Global Investors and followed by Sunley House Capital, an affiliate of private equity manager Advent International, was the first to bring a massive and crucial capital injection to accelerate the company’s growth. Temasek added $20 million to the round a month later.
In 2021, the fintech decided to group all its businesses (Conductor, Dock, and Muxi), adopting the name Dock definitively.
The growth so far has also brought something that every company dreams of: a diversified and pulverized range of customers. If back in 2012, a single customer accounted for 65% of the company’s revenue, that no longer exists. So much so that Soares was unable to point out, during the interview, a predominant sector or segment among Dock’s customers. Among the company’s clients are neobanks C6 Bank and Neon, digital wallets such as Mercado Pago, traditional institutions such as BMG and Crefisa, and acquirers such as Cielo.
New funding or IPO: What is Dock planning?
Accelerating regional expansion also means beefing up teams. Dock’s team grew by 72% in 2021, with more than 700 new hires, making the company’s staff exceed 1,700 employees. “Technology matters, but at the end of the day, what’s game-changing is a consumer-centric platform, and that’s what we’re building here [at Dock].”
According to Soares, Dock is not necessarily looking at new funding at the moment. Although Soares did not say when exactly, what is really on the horizon is an IPO. But the company, which according to Reuters sources, began preparing for this at the end of 2020, should only start the process in earnest if it identifies a need and an opportunity to accelerate even further. Given the international scenario, the post-pandemic economic crisis and the war in Ukraine, and the election year in Brazil, it is likely that this will not happen this year.