Brazil‘s Itaú, Latin America‘s largest listed bank, will invest about BRL 1 billion to become a partner in the fintech arm of technology group Totvs, showing the growing focus on the combined offer of financial and management services to small and medium-sized companies in Brazil.
According to the agreement announced on Tuesday, Itaú will hold a 50% stake in the Totvs “techfin” business, which includes the techfin and supplier assets, paying BRL 410 million in cash, in addition to investing BRL 200 million in the business.
The bank will also pay up to another BRL 450 million after 5 years, subject to the achievement of certain goals.
With the joint venture, “Totvs clients will be able to contract a complete range of financial products, such as credit, cash management and receivables anticipation,” according to a statement issued by the companies.
The agreement between Itaú and Totvs comes at a time of growing investor interest in businesses that offer financial and management services for small and medium-sized businesses in Brazil.
The day before, the financial and management solutions platform for businesses Stark Bank announced that it had secured a $45 million funding round that included among others Bezos Expeditions, from Amazon founder Jeff Bezos.
From Itaú’s perspective, the joint venture ensures that the bank will be the sole vehicle for the development and distribution of financial services from Totvs, the largest supplier of management software for small and medium-sized businesses in the country, and will be able to benefit from integrations with the other management systems of the now partner.