Business

Bolstered by Brazil's cenbank's new rule for receivables, fintech TruePay raises round to facilitate credit for shopkeepers

The startup, founded in December 2020, received a $8.5 million Seed round from Kaszek and Monashees

TruePay co-founders Pedro Oliveira and Luis Eduardo Cascão. Photo: TruePay/Courtesy
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  • The GFC and ONEVC funds also participated in the Seed round;
  • Under the new Brazilian Central Bank rule, all card operations are registered in a unified central office.

In June, when Brazil’s Central Bank changed the rules for the operationalization of the registration and trading of card receivables, a new door was opened for the business that Pedro Oliveira and Luis Eduardo Cascão had been setting up since December 2020. The fintech TruePay, which allows shopkeepers to get credit using card receivables as a form of payment, won the endorsement of Kaszek and Monashees with an $8.5 million round.

The GFC and ONEVC funds also participated in the Seed round. Proceeds will be applied in technology to develop the startup’s digital platform, through which shopkeepers will be able to access credit to buy from suppliers with no fees. For suppliers that guarantee credit, TruePay charges an undisclosed fee.

READ ALSO: Marvin, a card receivables fintech, raises a second round in less than 3 months

In Brazil, where installment purchases are traditional in retail, small retailers end up taking longer to receive what they have sold, “the receivables” from purchases paid in installments on credit cards. If on the one hand, the retailer takes time to receive, he has little time to pay the bills to suppliers, which generated a working capital problem.

Now, under the new Brazilian Central Bank rule, all card operations are registered in a unified central office, which certifies the existence of receivables, allowing creditors to use these future payments as collateral to obtain cheaper credit. Previously, retailers in need of working capital had to agree to higher rates from banks or acquirers to anticipate receivables.

Inspired by the impact of Visa and Mastercard that allowed the consumer to buy in installments and the seller to sell in installments without taking risks, TruePay wants to rock the market again with the anticipation of credit card receivables and is hiring to add to its team of 30 employees spread across Brazil.

READ ALSO: Brazilian Central Bank: new receivables rule unlocks loans for small and medium businesses

Oliveira and Cascão have experience with venture capital funds such as DNA Capital and Kaszek and decided to team up to “unlock business relationships in Brazil”, as Cascão told LABS.

“We created a company where the shopkeeper can access free credit and the supplier can sell more, without any kind of default risk. The Central Bank regulation is just a means, our product gives the shopkeeper a possibility to release working capital by accessing free credit with his supplier, with more term and more limit than he is used to.”

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