- The deal marks U.S. bank’s debut in Brazilian retail;
- So far, JPMorgan has concentrated its activity in Brazil in corporate lending and investment banking.
JPMorgan has acquired a 40% stake in Brazilian neobank C6 Bank, both companies said on Monday. The deal marks the US-based institution in the retail segment. Until now, JPMorgan has concentrated its activity in Brazil in corporate lending and investment banking. Founded in 2019 by former partners of Latin America’s largest independent investment bank, BTG Pactual, C6 has 7 million customers.
C6 reached a valuation of BRL 11.3 billion ($2.28 billion) in December, when it raised BRL 1.3 billion from 40 individuals and families.
“Partnering with JPMorgan Chase, a global leader in financial services and a trusted name in retail banking, is a game-changer,” said Marcelo Kalim, CEO and co-founder of C6 Bank.
To LABS, the neobank added that the “JPMorgan Chase stamp” places the company in a privileged position. “The deal is a demonstration of the confidence of one of the most respected institutions in the world in everything that C6 Bank has built to date: a bank, without physical branches, with more than 20 products in its portfolio and more than 7 million customers reached in less than two years – and present in 100% of Brazilian cities. The day-to-day life of the bank does not change. The bank remains independent, with the same executives running the business. The company, with its more than 1,600 employees, will remain focused on building the best financial products and expanding its customer base in Brazil. What changes is that, with the partnership, the bank will be able to offer even more innovative products,” said C6 in a statement sent to LABS.
The acquisition value and C6 valuation have not been disclosed. C6 posted a net loss of BRL 607 million in 2020, ending the year with BRL 8 billion in assets. The company told LABS that the operation “is not related to any loss coverage” and that both institutions “envision a new growth phase for C6 Bank.” The company also denied that the deal is a prior move to a possible IPO.
In a joint statement, JPMorgan and C6 highlighted Brazil regulatory reform, which has fostered competition and allowed digital banks to gain market share. Earlier this month, Warren Buffett‘s Berkshire Hathaway invested $500 million in Nubank at a valuation of $30 billion.