Visa acquires Brazilian Startup, Pismo for $1 billion

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Visa, the renowned credit card company, has made a significant move in the fintech industry by acquiring Pismo, a Brazilian payments infrastructure startup, for a staggering $1 billion in cash.

According to reports by TechCrunch, this acquisition is expected to be one of the largest mergers and acquisitions deals in the fintech sector this year.

The startup founded in 2016 processes nearly 50 billion Application Programming Interface (API) calls and facilitates $40 billion in transaction volumes annually. It also powers approximately 80 million accounts and has issued over 40 million cards.

It is noted that the São Paulo-based fintech has been quietly amassing an impressive client base that includes major names such as Citi, Itaú (one of Brazil’s largest banks), Revolut, N26, Nubank, and Cora.

Pismo operates in multiple countries across Latin America, including Mexico, Chile, the United States, and Europe. It has also secured customers in India, Southeast Asia, and Australia.

The startup’s cloud-native issuer processing and core banking platform focus on providing banks, fintechs, and other financial institutions with flexibility and agility.

“This platform allows customers to launch various products related to cards, payments, digital banking, digital wallets, and marketplaces. Pismo also empowers financial institutions to take control of their core data and leverage it intelligently.”

Visa’s acquisition of Pismo will position the company to offer core banking and issuer processing capabilities for debit, prepaid, credit, and commercial cards through cloud-native APIs.

The startup’s platform will also enable Visa to support and connect with emerging payment rails, such as Pix in Brazil, for its financial institution clients.

Jack Forestell, Visa’s Chief Product and Strategy Officer, expressed that the acquisition of Pismo will enable Visa to provide more differentiated issuer solutions to its financial institution and fintech clients.

“The deal is expected to close by the end of the year, subject to regulatory approvals and customary closing conditions. Pismo will retain its current management team, remaining headquartered in São Paulo.”

Notably, Pismo’s Series B funding round raised $108 million in October 2021, with SoftBank, Amazon, and Accel leading the investment.

Other participants included Falabella Ventures, PruVen, Redpoint Ventures, and Headline. Although the company did not disclose its valuation, Accel partner Ethan Choi stated that the sales price reflected a strategic multiple.

As a software-as-a-service (SaaS) business, Pismo primarily generates revenue through transaction fees. Its pricing structure is based on active accounts, with prices decreasing as the volume of clients increases.

Chief Executive Officer (CEO) of Pismo, Ricardo Josua emphasized the company’s aim to enable clients to launch cutting-edge payment and banking products using a single cloud-native platform, regardless of geographical location or currency.

Visa’s support will assist Pismo in expanding its global footprint and shaping the future of banking and payments.

Visa’s acquisition of Pismo represents not only one of the most significant cross-border fintech deals in Latin America but also highlights the global card network’s strategy to provide core banking and card issuing services alongside its credit and debit card offerings.

The deal is expected to leverage synergies by selling critical APIs to Visa’s existing financial institution customers.

This move by Visa is not its first foray into infrastructure-related acquisitions. In March 2022, the company completed a $2.15 billion acquisition of Tink, a prominent European fintech startup focused on open banking APIs.

Visa had also attempted to acquire Plaid, a popular US-based open banking startup.

Pismo was founded in 2016 by Juliana Motta (CPO), Ricardo Josua (CEO), Daniela Binatti (CTO), and Marcelo Parise (VP of engineering).