Bloomberg Línea — Despite market challenges and a more stringent set of regulations looming, a new contender believes that promising the users more control of credit and debit operations will reinforce its position in the Brazilian neobank arena.
According to the US entrepreneur Brad Liebmann, alt.bank, is bringing to the local market a card that combines savings accounts and credit cards to concede limits. That is the first one in the market, he says, adding that it is the result of bringing the startup to concentrate in a time of uncertainty for startups: bringing the heads down and focusing on the customers.
The CEO and founder bets the fintech has all the chops to know the user’s needs and, based on that, to offer a better way to know their credit limits.
“The limit increases in two ways, they can increase it by having their private banking account paying their bills on time. The other way is to put the money in the alt.bank savings account.”
The company does not disclose the number of debit cards it already has throughout Brazil but says it is “hundreds of thousands”. The waitlist for the credit card was about 200,000, growing about 1,400 a day, according to the company.
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“It’s the first post-paid credit card where you get to control your limit with savings,” says the CEO. However, alt.bank can give up R$ 20,000 ($3,700) of credit.
Users can add their savings to complement the monthly limit for the Visa banner credit card. The savings account yields 100% CDI calculated daily.
Liebmann says the company’s targets are people who like to save money and people who like to pay in full every month.
“We don’t care about the social-economic class. We want to appeal to people who are serious about getting good returns from their savings. People who typically pay their card every month.”
Alt.bank only operates with the current account, saving accounts, and now debit and credit cards.
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“As a startup, we’re almost always raising money. We have really good investors,” says the CEO. Last year, the fintech raised a $5.5 million Series A round led by Union Square Ventures.
Liebmann himself also invested over US$ 4 million into the company based on the exit of his previous company Simply Business, acquired by The Travelers Companies for $490 million in 2017.
“There is zero chance that we’re going away and so we have plenty of funds. And we’re actually hiring consistently. The last six quarters on average we hired two people per month,” he says.
At the end of March, alt.bank had 107 people and today has 113. “We will continue hiring probably two a month for the rest of this year. What we don’t do because we’re very focused on the bottom line is we don’t do crazy things like hiring 100 people in one year. We scale gradually and reasonably,” stated the CEO.
New playbook
Even though the market has changed, the executive says the fintech will continue its pace of hiring about two people per month.
In March, the Brazilian Central Bank has adjusted regulatory asymmetry for fintechs, toughening capital requirements for payment institutions that want to offer credit.
The new rules begin to take effect in January 2023, but according to the specialists, it will affect large fintechs only, like Nubank.
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