Visa, the world’s largest payments processor, has announced its acquisition of Brazilian fintech platform Pismo for $1 billion in cash. This move aims to enhance Visa’s footprint in Latin America and demonstrates renewed confidence in the region amidst a slowdown in funding.
Expanding Footprint in Latin America
Visa’s acquisition of Pismo represents the company’s first major takeover since its purchase of European open banking platform Tink for $2.2 billion and British cross-border payments provider Currencycloud in 2021. With this deal, Visa seeks to leverage Pismo’s cloud-based platform, which currently serves over 70 million accounts and facilitates more than $200 billion in transactions annually. Through this technology, clients can issue Visa and Mastercard cards.
A Landmark Exit for Latin American Fintech
The acquisition of Pismo marks the largest fintech exit in Latin America since the public listing of Nubank in late 2021, as well as the largest disclosed startup exit of the year. Earlier this year, there were reports that Mastercard also expressed interest in acquiring the banking infrastructure startup, but no comment has been provided by the company thus far.
Supporting Latin American Tech Amidst Funding Slowdown
Latin America experienced an 82% year-on-year drop in venture funding in May, according to Sling Hub, a data group. This decline can be attributed to high interest rates, concerns of a recession, and market volatility affecting tech valuations. Visa’s acquisition of Pismo, amid this funding slowdown, signals the company’s commitment to supporting the growth of fintech in the region.
Retaining Management and Global Operations
Upon completion of the deal, which is expected to close by the end of the year, Pismo will maintain its current management team. The Sao Paulo-based company, founded by entrepreneurs Ricardo Josua, Daniela Binatti, Juliana Binatti, and Marcelo Parise, operates in Europe, North America, Southeast Asia, India, and Latin America.
Investors and Funding
Pismo has raised over $110 million from prominent investors, including SoftBank Group Corp, Amazon.com Inc, venture capital firm Accel, and Headline, which owns approximately 30% of the company and initially invested in its seed round.