If there’s one area that has so far felt immune to the global downturn in venture capital, it’s infrastructure. Businesses that offer banking as a service and help other businesses offer their own financial services and products in particular continue to rake in dollars.
The last such company in Latin America is based in São Paulo Dock, which operates a comprehensive digital payments and banking “platform” across the region, where there is massive demand for financial infrastructure that can help drive inclusion. The startup raised $110 million in a growth funding round led by UK-based companies Lightrock and Silver Lake Waterman, taking its valuation to over $1.5 billion. Existing backers Riverwood Capital, Viking Global Investors and Sunley House Capital also participated in the funding.
Dock is the product of the unification of three brands – Conductor, Dock and Muxi – which were combined in August 2021 to offer “complete” financial services and end-to-end technology for the payment and digital industries. Conductor was a 25-year-old, 80-person company that processed credit cards and had annual sales of approximately $4.3 million (not to be confused with a US-based company called Conductor). In 2014, Riverwood Capital and Antonio Soares – who is now Dock’s CEO – bought out 100% of Conductor and essentially created the company that is Dock today. The company raised $170 million in 2020 in a round led by Viking Capital after landing an undisclosed amount from Visa Ventures in 2018.
Dock says its open API and cloud-native offering enables “any business” to offer financial services, including launching and managing personalized cards, processing payments and banking as a service with digital accounts , mobile payments and fraud management.
The company’s customer base includes fintechs, retailers, banks and technology companies that are focused not only on improving the customer experience for the currently banked population, but also on helping to bring consumers previously unbanked and underbanked to digital payments and banking systems.
Today, Dock operates 65 million active accounts through relationships with over 300 customers. It processes more than 5 billion transactions per year thanks to its cloud offer. The company says the total number of monthly active accounts it processed in December 2021 increased 55% year-over-year to 48.4 million. Meanwhile, its number of active digital bank accounts grew 380% year over year.
Co-founder Marcelo Jacques noted that when the company started talking to the market about what it was doing, basically explaining what infrastructure meant in fintech and payments, “it was tough.”
“People didn’t get it,” he told TechCrunch. “And so wWe’ve spent a lot of time talking about the value we bring to the market. It’s interesting to see that it’s now something that’s relatively understood by the market.
As such, the company has shifted its focus from explaining what it does to further avenues of growth for the business.
“There is a great demand and need for high-quality infrastructure for newcomers to launch new businesses and also for current market players to launch new products,” Jacques told TechCrunch. “So the demand is there and we are filling that void.”
Last year, as part of its expansion efforts, Dock acquired Cacao, a Mexican card processing startup, and BPP, a central bank-regulated payment institution specializing in banking as a service (BaaS). ).
Dock plans to use its new capital to accelerate its product development roadmap and global expansion plans, as well as to hire more. Currently, the company has 1,936 employees, with offices in São Paulo, Rio de Janeiro and Mexico City. Outside of Brazil, it is present in Mexico, Peru, Chile, Colombia, Argentina, Ecuador and the Dominican Republic.
“Dock is now the largest and most modern fintech partner available in Latin America. We enable any business of any size at any time to provide financial services to their customers,” Soares told TechCrunch. “We really understand our customers’ business issues and we understand that we need to create products not just for our customers, but for our customers’ customers. This is just the beginning for us. »
Francisco Alvarez-Demalde, co-founder and managing partner of Riverwood Capital, said that when his firm initially invested in what is now Dock in 2014, his first thesis was that the platform could become a “champion of the next generation” local for card issuance deals in Brazil, which he saw as ripe for digital transformation at that time.
“As early as 2016, Dock had a vision to create a banking-as-a-service offering on top of its digital payment platform, or ‘Bank in a Box’ as we called it then, providing all software and service layer components necessary for customers to deliver integrated banking and payments,” Alvarez-Demalde told TechCrunch. “As a result, Dock not only enables its innovative customers to integrate comprehensive digital financial services in their offerings, but they have become a reference in the field of fintech infrastructures on a global scale.”
Admittedly, Latin America has continued to attract venture capital in recent years. LAVCA – the Association for Private Capital Investment in Latin America – recorded a preliminary total of $2.7 billion invested in 157 deals in Latin America for the first quarter of 2022. This is the fourth quarter on largest on record for investments in Latin America, according to the body. This represents a 66% increase from the $1.7 billion invested in the first quarter of 2021 and a 371% increase from the $582 million in the first quarter of 2020.