Papara Becomes Turkey’s First FinTech Unicorn With Beka Finance Deal

Papara has become Turkey’s first FinTech unicorn company.

The achievement — reaching a valuation over $1 billion — follows a major deal with Spain’s Beka Finance,  Bloomberg reported Wednesday (July 12).

In that deal, Papara gave Beka an undisclosed amount of cash and shares in exchange for the acquisition of Rebellion, a Spanish competitor of Papara that offers mobile banking services, according to the report.

“When we gave Beka Finance our shares, they became shareholders at a price level that valued our company at unicorn level,” Papara Founder Ahmed Karsli said in the report.

Papara was founded in 2016 as an electronic payments firm and expanded its offerings this year to include insurance for pets, homes, travel and mobile phones, according to the report. It now has 16 million active users.

The company is now negotiating to buy another European neobank and will disclose the exact amount of its valuation at that time, the report said.

“Papara is the first FinTech unicorn startup out of Turkey,” Birce Ciravoglu, mergers and acquisitions (M&A) and expansion director at Papara, said in the report, adding that the company has also become one of the leading Fintechs in Europe.

Turkey’s faltering economy and the challenging global macroeconomic environment will lead to a wave of consolidation in the FinTech market, with smaller, money-losing firms increasingly absorbed by larger companies with deep pockets, Sipay Founder and CEO Nezih Sipahioglu told PYMNTS in an interview posted in April.

Sipahioglu added that Turkish banks still see FinTechs as competitors, but the situation has improved over the years and financial institutions need to recognize the value they stand to gain by partnering with FinTechs.

Turkey is also becoming a prime market for digital goods and services, in which the opportunity “can’t be overstated,” Worldline Head of Digital Goods and Services Michael Bilotta told PYMNTS’ Karen Webster in an interview posted in April.

“What you see is that because it’s a young population, they’re becoming more and more sophisticated,” Bilotta said at the time. “They’re the ones that are starting to guide this. It’s our responsibility as the payment service provider to listen to what they’re saying, and then build the on-ramps.”