Thiago Alvarez, CEO at GuiaBolso
Thiago Alvarez, CEO at GuiaBolso. Photo: Aluísio Alves/Reuters.

Latin America's largest digital wallet, PicPay buys 100% of the finance app Guiabolso

Guiabolso's founding partners Thiago Alvarez and Benjamin Gleason will also assume a minority stake in PicPay

Ler em português

The largest digital wallet in Latin America and that now calls itself a “financial marketplace,” PicPay announced this Friday the purchase of 100% of the personal-finance application Guiabolso. It’s Brazil’s first major transaction motivated by the so-called “open banking.” The acquisition comes weeks after PicPay suspended its public listing plans on Nasdaq and shows that the company is betting heavily to monetize its customer base, which has surpassed 55 million users.

“The acquisition puts us at the forefront of open banking,” PicPay’s vice president of financial services Eduardo Chedid told Reuters.

READ ALSO: The promises of Brazilian open banking: customer empowerment and market opening

The executive said that most of the operation was made in cash, but also that the founding partners of Guiabolso, Thiago Alvarez and Benjamin Gleason, will also assume a minority stake in PicPay. Details were not revealed.

Guiabolso’s investors, such as Vostok, Kaszek, Ribbit Capital, QED Investors, Omidyar Network, and IFC funds, have fully sold their stakes in the business.

Created in 2012 as a pioneer of open banking, a system that the Central Bank is implementing in the country, Guiabolso uses data intelligence to offer financial guidance to around 6 million users and, in recent years, has become a portal for products such as credit, personal investments, and insurance.

Guiabolso’s 200 employees will be integrated into PicPay, which has 3,000 employees. Alvarez, president of Guiabolso, will be PicPay’s director of open banking.

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

Founded in the city of Vitória, Southeast Brazil, in 2012 as a digital portfolio, PicPay gained strength after being purchased by the J&F group, owner of the protein giant JBS, starting to act as a financial marketplace, digital store, and ad portal.

The operation is just one more example of the turmoil that the financial sector in Brazil is experiencing, amidst innovations led by the Central Bank, such as the instant payment PIX and the regulation of open banking.

PicPay planned an initial public offering (IPO) on Nasdaq, forecasting a market cap of around $20 billion. As the company realized that investors were offering a much lower valuation, the controllers gave up on the deal. Simultaneously, J&F announced a plan to invest BRL 3 billion in PicPay by 2023. The company wants to reach 100 million users in the coming years.

(Translated by LABS)