Summary:
PayPal’s venture arm invests $15 million in Brazilian startup Ume.
Ume also secures $20 million in debt financing from Verde, ItaĂş, and others.
Funding will enhance sales, marketing, and technology infrastructure.
Ume aims to capitalize on the rise of buy now, pay later services in Brazil.
The startup has integrated Pix, Brazil's real-time payments system, to boost growth.
Dive Brief
PayPal’s venture arm has joined forces with other investors to inject $15 million into Ume, a Brazilian payment services provider focused on small and mid-sized merchants. This investment group includes NFX, Globo Ventures, and Clocktower Ventures.
Ume has also secured $20 million in debt financing from Verde, ItaĂş, and other creditors. The startup plans to utilize this funding to enhance its sales, marketing, and technology infrastructure, while also expanding into new markets. A significant part of the investment will be directed towards improving its Pix capabilities, tapping into Brazil's real-time payments system.
Dive Insight
Before investing in Ume, PayPal Ventures has actively invested in international e-commerce and AI companies. Earlier this year, it was part of a $30 million investment in Rasa, a generative AI company serving various industries, including banking and hospitality. In 2021, PayPal Ventures also acquired a 6.73% stake in MELI Kaszek Pioneer, a special-purpose acquisition company targeting fintech and e-commerce in Latin America.
Ume capitalizes on the growing trend of buy now, pay later (BNPL) services in Brazil, currently serving 6,000 businesses and reaching 220,000 consumers. The company reports that 85% of BNPL purchases come from repeat customers, showcasing customer loyalty. By integrating the Pix system, which has gained immense popularity in Brazil since its launch in 2020, Ume has successfully increased its merchant user base and customer retention.
Ian Cox, a partner at PayPal Ventures, highlighted Ume's impressive traction, stating that they are poised to "build the future of payments in Brazil." With 80% of transactions occurring offline, Ume offers both merchants and consumers flexible payment options. Merchants pay a fee for purchases made using Ume credit, while consumers typically incur interest on installment payments.
Ume CEO Berthier Ribeiro emphasized the startup's goal of providing SMBs with a range of financial products that enhance customer shopping and payment experiences, fueling growth in the Brazilian market.
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