Two weeks ago, the American investment and corporate bank J.P. Morgan announced its first investment in a Latin American payments startup, FitBank. The value of the deal was not disclosed by any of the parts involved, but the Brazilian fintech said that it will use the new resources to improve its product portfolio and to expand internationally. As part of the investment, J.P. Morgan will acquire a minority stake in FitBank and a board seat, that it will be filled by the bank’s head of wholesale payments in Brazil Renata Vilanova Lobo.
Since its foundation in 2015, FitBank has opened 180,000 accounts for 96 corporate customers. What the company does is to offer a white-label platform, which allows banks, fintechs, investment funds, acquirers, issuers, and retailers to offer their customers, a series of payment solutions, including a digital account solution.
In other words, these companies use FitBank technology, but with their own brand. Currently, the fintech manages around BRL 1 billion in transactions per month, according to the newspaper Valor Econômico, from companies of 18 different sectors. Quite a growth compared to 2019 when the company reached BRL 2 billion in transactions.
Last year, FitBank filed for authorization from the Brazilian Central Bank to be a payment institution issuing prepaid electronic money (the company expects the process to be completed in the second half of this year).
“The thing is: we connect our system to the part of our clients’ system that demands the transaction, and once we do that we make it in a very modern, cheap, fast, and controlled way. This allows us to talk to all these different businesses as if they were similar because what they’re asking is to hold and move money around, and this is something we do very well,” Otavio Farah, FitBank’s CEO, told LABS.
Basically, J.P. Morgan will use FitBank as an arm for payments solutions, especially in Latin America, offering the fintech’s platform to its wholesale customers as the first step in this direction.
As reported by the newspaper Valor Econômico, this is FitBank’s third round of investment. In the first one, a year after the fintech’s creation, Farah and two other founders, Rener Menezes and Mauricio Zaragoza, managed to attract three former XP partners (Marcelo Maisonnave, Eduardo Glitz, and Pedro Englert). In the second round, in 2018, they brought in João Chacha and Alejandro Vollbrechthausen, former Goldman Sachs executives, who are now part of the company’s administration board.
According to Menezes, currently the startup’s CTO, FitBank’s main objective is to be the “fintech of fintechs”, offering a financial transaction infrastructure as a service to all types of companies.