Ualá Eyes Banking Expansion After $2.75 Billion Valuation

Argentina’s Ualá has reportedly raised $300 million, valuing the FinTech at $2.75 billion.

“We’re going to use this to scale Argentina, where my goal is to be the largest bank in the country, not just by users but by book,” founder and CEO Pierpaolo Barbieri said in an interview with Bloomberg News posted Monday (Nov. 11).

He added that the company has not ruled out growth in other markets or acquisitions. The funding will also help with “the expansion of business units in both Mexico and in Colombia,” said Barbieri.

Ualá reached a valuation of $2.45 billion in 2021 following a $350 million injection of private funding. The chief executive told Bloomberg the new valuation “shows confidence” in Ualá’s potential, adding, “We’re very proud to be able to show leadership in the region.”

The company will try to reach profitability in all markets before considering an initial public offering in the U.S., he added.

According to Bloomberg, Ualá is the largest startup in Argentina, with 8 million users. Six million of them live in Argentina, accounting for more than 17% of the country’s adult population. In addition to debit cards, the company offers products that include payments, credit, merchant acquiring and investments.

In other news from Latin America, PYMNTS on Monday examined the widespread use of prepaid cards in the region, where many consumers are unbanked or underbanked, and the bulk of the population doesn’t have credit cards.

For some companies, prepaid cards can make up as much as 70% of their business, Wallet Guru Co-founder and CEO Emilio Rubio told PYMNTS’ Karen Webster. But getting those cards and then loading and reloading funds can be a time-consuming and costly experience.

“This is money that they have to pay up front, and fatigue is driving churn,” Rubio said.

That means businesses — especially streaming providers and cellphone firms — lose consumers they have spent money and time cultivating. Replacing that lost business, or drawing consumers back, takes more time and money. Even without the churn, the cost of prepaid can reach as high as 10% of the sales that firms collect via those channels, he said.

Rubio said his company is building a business model that will give consumers an easier way to access and pay for basic, essential services. Wallet Guru last month teamed with Interledger Foundation to develop what they called the “underlying infrastructure for a new pay-as-you-go system,” facilitated by a Wallet Guru consumer-facing digital wallet, a business-facing platform and Interledger’s protocols to let consumers pay with traditional or digital currency, with no bank account needed.