Fintech unicorn Ualá lastly obtained a banking license in Mexico, clearing the way in which for the neobank to aggressively broaden its vary of services within the North American nation.
The Mexican regulator just lately authorized its acquisition of ABC Capital, a medium-sized conventional monetary establishment in Mexico. The inexperienced gentle from the Nationwide Banking and Securities Fee comes greater than a yr after the Argentine fintech had first pulled the set off on the deal.
The Buenos Aires-based fintech, backed by heavyweight traders reminiscent of Tencent and billionaire George Soros, is now all set to pursue a product diversification technique within the nation.
“The acquisition will enable Ualá to speed up the launch of latest merchandise in Mexico,” mentioned Pierpaolo Barbieri, the corporate’s CEO and founder. He regarded Mexico as Ualá’s most important progress market, noting an “absolute” dedication to proceed increasing in Mexico.
“We wanted a financial institution to supply probably the most full monetary ecosystem.”
As the corporate rolls out extra merchandise, Barbieri mentioned, it might degree its providing to that of Colombia and Argentina, the opposite two markets the place Ualá operates. “This can be a large step for the regional growth of Ualá,” he mentioned. The corporate had beforehand introduced a $150 million funding within the area within the subsequent yr and a half.
Uala in Mexico, an more and more crowded market
To make certain, Mexico is Uala’s most important wager in Latin America. With 130 million residents and a big swath of the underbanked inhabitants, the potential risk-reward has been engaging sufficient to woo many digital endeavors.
Nubank, the biggest digital financial institution within the area, has additionally expanded to Mexico to duplicate its extensive success in Brazil. Different locally-funded digital initiatives have additionally come out robust to compete in Mexico’s more and more crowded digital market. These embrace Bineo, a big conventional financial institution Banorte’s digital initiative, and Coca-Cola bottler Femsa’ Spin.
In keeping with an analyst, the banking license for Ualá is a vital factor in pursuing its diversification technique. “Now, Ualá can have a variety of merchandise due to its banking license,” mentioned Héctor Ortega, CEO of consultancy agency Hypertech, in an interview. “Whereas Nubank focuses on credit score as its flagship product, Ualá’s wager is to diversify and create a variety of economic companies with out specializing in only one area of interest.”
A regional play
It isn’t the primary time Ualá has scooped a banking license. In Argentina, the corporate purchased 100% of Wilobank final yr, thus accessing its banking capabilities. The corporate reviews 5 million customers within the area, most of that are based mostly in its house nation.
In Colombia, nonetheless, the fintech has pursued a unique regulatory technique. It isn’t within the means of buying a license, neither is its intention to take action shortly, CEO Natalia Rios advised Fintech Nexus just lately.
“We have now to construct an ecosystem, as that’s one of the simplest ways to combine folks financially,” mentioned Rios. “We would like them to have the ability to handle all their funds throughout the similar software.”