Nomad, a Brazilian neobank which offers accounts in USD, has raised the largest investment round for a Latin American fintech this year, collecting US$61 million in series B capital. The deal is raising optimism about market recovery, although the startup’s CEO, Lucas Vargas, tells iupana that negotiations were “challenging” and “complex”.
The equity round led by Tiger Global comes in a difficult season to attract investment, especially for growth-stage companies such as Nomad. In Q2, for example, 4 out of 5 financings were directed towards early-stage fintechs, according to CB Insights.
“It was certainly a more complex process,” Vargas said, comparing the recent funding to the firm’s US$32m Series A extension, which was led by Stripes in May 2022.
“Naturally, with a more challenging context, there was more scrutiny, in-depth evaluation and an extensive process for investors to feel comfortable with the future opportunity,” the CEO explained to iupana. The company noted in a statement that the investment marks Tiger Global’s “return to Brazil” and that Nomad now has a market valuation of R$1.8 billion (US$365 million).
Tiger Global, one of the largest global venture capital firms, had slowed its bets in Latin America, while it embarked on the sale of part of its portfolio seeking liquidity with the sale of assets.
Nomad, a direct competitor of Wise in Brazil, initially offered an account in dollars and a US debit card and has since expanded into an investment platform. With the new capital, the company will continue to explore products, including in the credit business.
Read more about Nomad’s plans – and the market for serving “digital nomads” in Latin America, here.
In other investment news…. Citi bets on Peruvian FX startup Rextie
- Citigroup made its first fintech FX investment in Latin America, buying a stake in the Peruvian fintech Rextie, specialized in currency exchange. Rextie has 182,000 corporate and individual clients. The terms of the deal were not disclosed, although we understand it does not involve a controlling stake. Rextie’s CEO told iupana the investment allows Citi to amplify the reach of the bank’s FX services, and reach smaller businesses through the Peruvian startup. For Rextie, the deal opens the opportunity to offer better rates to its clients – and potentially start offering cross-border payments services. Read the full interview in Spanish, here.