Bloomberg Línea — Ademar Proença, who since 2019 had held the position of COO at point-of-sale (POS) fintech Hash, has launched a new startup for financial infrastructure, Fiinco.
The entrepreneur is using his own capital to build the company, but says he will seek outside investment once he has a clearer vision of the new product.
Proença told Bloomberg Línea that he has a team working in ‘stealth mode’ and did not disclose more information to “preserve strategy”.
Fiinco, he said, will work with financial infrastructure, in a similar model to Hash to allow companies to access financial services in an easier way, without having to hire a technology team to develop in-house solutions.
Unlike Hash, Fiinco will not offer payment terminals. Instead, “it will be a product that in my past experience was very much in demand from customers. It was something they were looking for and Hash could not meet. Now I decided to meet this demand,“ Proença said, adding that he cannot elaborate on Hash’s current situation, as he has taken many lessons onboard on how to build a company from scratch and make the product fie the market, which is what Hash did during the pandemic in 2020.
“Another valuable lesson [he learned from Hash] is the financial architecture part,” he said.
Hash, a Brazilian fintech founded by former Pagar.me employees João Miranda and Thiago Arnese, laid off employees in mid-August and was forced to terminate new projects with clients.
Hash’s CEO, Miranda was one of the first employees of Pagar.me, a fintech owned by Henrique Dubugras and Pedro Franceschi, co-CEOs of Brex, that wabought out by Stone (PAGS). In 2017, Miranda launched Hash with the idea of allowing any company to offer financial services.
That idea is endorsed by a16z investor Angela Strange, who is investing in Pomelo, an Argentine fintech with a business model based on financial infrastructure for companies.
According to Hash’s business model, client companies can leave the fintech in charge of building the technology, regulation and operations, and Hash offers a white-label payment machine, with the client company’s name. It is the same business as Zoop, a payments company owned by Movile, the investment holding company that also owns iFood.
Hash’s impasse
Hash raised a $40 million Series C in October 2021. The company has US-based QED Investors, Kaszek, and Canary among its investors. Round after round, the company increased the number of employees (see chart below) and spent the money on, among other things, marketing campaigns and rebranding.
But with a more complex scenario for raising venture capital, a new round did not come, and Miranda had to cut staff and stop serving clients. One of the clients served by Hash was the unicorn Neon, owned by Pedro Conrade. The fintech company is responsible for the machines used by MEI Fácil, a company owned by Neon.
An executive familiar with the discussions with Neon said the neobank would not incorporate Hash’s operations and would seek another partner for the production of POS or develop the technology in-house. In a statement, MEI Fácil said it is not taking over Hash’s infrastructure.
Miranda, Hash’s CEO, told Bloomberg Línea that his startup is “not over,” and neither is it being absorbed by Léo Madeiras, a carpentry retailer and its largest customer. Miranda declined to comment on any possible M&As.
On a visit to the websites of MEI Fácil and Léo Madeiras, it is not possible to acquire new machines. MEI Fácil says that new vending machines are temporarily unavailable, and Léo Madeiras says that the site of the POS -- called Leozinhas -- is undergoing some adjustments.
According to Brazil’s tax agency Receita Federal, as of this Thursday Hash’s corporate names both in Brazil (Hash Lab Participações, a limited liability company whose activity is holding non-financial and financial institutions) and in Delaware (Hash Payments Solution Holding II LLC) remain active.
According to the documents, Hash payment institution has a share capital of 166 million reais ($32 million) and Hash overseas has a share capital of 105 million reais ($21 million).
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