RecargaPayThe Brazil-based fintech company that allows users to top up their prepaid phones online announced this morning that they have closed their $ 70 million Series C. Operating entirely in Brazil, the company was founded in 2010 by Miami-based series entrepreneur Rodrigo Teijeiro, co-founder and CEO.
Unlike the United States, where most people have a cell phone tariff through a major airline, Brazil – a country where the minimum wage is currently $ 1,100 a month (around $ 202) – has a lot of people Buy calling cards in local stores to add credit to their phones, which can help avoid a monthly bill.
“Most of the people used prepaid [phones] for control because they didn’t trust the phone companies – they didn’t want roaming charges or go through charges, etc., ”said Teijeiro. Many of us can relate to the days when we got home from an international trip due to roaming charges and have an astronomical phone bill.
In 2014, Teijeiro and his co-founders – one of whom is his brother Alvaro, the CTO – turned the RecargaPay website into an app.
“Before RecargaPay, if your phone ran out of credit and it was 10pm and you had to make a call, you had to find a store that sold the prepaid cards to add the credit to your phone. It was super inconvenient, ”added Teijeiro. Cell phones quickly caught on in Brazil because traditionally it was difficult to get a landline – an ordeal that often took months to consolidate.
RecargaPay originally operated in various Latin American countries such as Argentina, Chile, Colombia, Mexico, Peru and Brazil as well as in Spain and the USA. However, in 2016 the company decided to focus on the Brazilian market, as not only is it the largest in LatAm, but it also has the highest penetration of credit cards.
“The biggest mistake investors make when investing in LatAm is believing that LatAm is an entire market. Especially with fintech, all regulations are very different. That’s why it’s difficult to scale in LatAm, ”he said.
The company makes money by charging a monthly fee of $ 19.99. When a customer loads the app online, he receives 4% cashback, as the mobile operator pays RecargaPay the corresponding amount, which he then forwards to the user.
The company that is EBITDA positive according to Teijeiro, has raised just over $ 100 million in capital to date and plans to use the $ 70 million to “expand its financial services offering to small businesses and consumers, including the advancement of its popular Prime + subscription program,” it says a statement from the company.
RecargaPay already offers much more than the possibility of refilling your mobile phone. Other features include the ability to buy gift cards, apply for and receive microloans, top up your public transport cards, and pay bills. Teijeiro stated that RecargaPay and Nubank, LatAm’s largest digital bank, are not direct competitors but operate in the same ecosystem. Many Nubank customers who now have a credit card thanks to the bank’s toll-free cards can top up their phones with RecargaPay, he added.
According to a 2020 report by TechnoBlogIn 2010, around 83% of cell phones in Brazil were prepaid. Today that number is smaller but still a whopping 49%. The change started in 2012 with the advent of smartphones in Brazil and the popularization of WhatsApp. While this may sound crazy, in the past Brazilians could only call others using the same cellular operator – if they called people on different networks they would charge a hefty fee.
T.To get around this problem, the Brazilians bought several cell phone chips from different vendors and had to refill these chips individually. You would also need to remember which of your contacts used which carrier – stunning, I know. When WhatsApp hit the market, this problem was completely eliminated, which is why it massively penetrated the Brazilian market.
(lr) Renato Camargo: Country Manager & CMO; Alvaro Teijeiro: Co-Founder & CTO; Gustavo Victorica: Co-Founder & COO; Rodrigo Teijeiro: Founder & CEO; Diego Escobar: CFO. Credit: RecargaPay
RecargaPay’s Series C was jointly run by Miami-based Fuel Ventures and Madrid-based IDC Ventures, which also included LUN Partners, Experian Ventures and ATW Partners.
“RecargaPay is a pioneer in payment transactions as one of the first all-in-one platforms such a wide range of everyday needs for Brazilians, ”said Maggie Vo, Fuel Venture Capital managing general partner and chief investment officer. “We are very happy to be supporting a company This actively improves the lives of so many people by giving them more control over their lives Finance while at the same time challenging the status quo of banking systems. “
“Often times people think that RecargaPay is for Unbanked, but it’s actually for Unbanked and Banked,” added Teijeiro. “We always planned to build a mobile money ecosystem in the long term. Our approach was to solve problems one by one. Now we have a vertically integrated payment platform that offers financial services. “