Geopagos, a digital payment infrastructure startup founded in Argentina operating in 15 Latin American countries, has netted venture capital for the first time to spur its growth, raising $35 million in a round led by Riverwood Capital, a global investor in high-growth technology companies, and in which Endeavor Catalyst also participated.
Sebastián Núñez Castro, Geopagos’ CEO and co-founder, tells Bloomberg Línea that he created the company in 2013 with Julián Lisenberg, Fernando Tauscher, Raúl Oyarzun and Damián Harburguer with the aim of boosting the use of digital payments in Latin America through payment acceptance infrastructure.
Geopagos’ differentiation is that its offering is omnichannel-based, he says.
The funding round will facilitate the acceleration of the company’s expansion in Latin America, mainly in Brazil, where it already has a local team and whose operation will be fully operational by the end of 2022.
The new capital will also be used to strengthen its technological infrastructure, with one of the main focuses, according to Núñez, to invest more in research and development.
This will drive the development of new products to expand Geopagos’ omnichannel proposition, as well as enabling new payment-acceptance methods and opening up its API platform for companies to speed up time to market.
As part of this investment, Riverwood’s Alex Porto joins Geopagos’ board of directors.
Scalability and profitability
Geopagos’ end-to-end digital solutions work primarily for financial institutions, fintech companies, retailers and software companies, among others, that want to launch or scale their payment acceptance business in the region.
In creating Geopagos, Núñez, who spent 14 years at American Express, where he led expansion throughout Latin America, aimed to transform the buying and selling experience for millions of Latin Americans, he says.
In recent years, Geopagos’ technology has evolved steadily, and Núñez says the company has offered different payment alternatives to end users, from QR to NFC technology.
The Endeavor entrepreneur also says his company has been profitable since year one, and has always reinvested its own revenues.
“That is why today, prior to this round, we have reached the point where 93% of the company’s capitalization table is owned by the founders, which is quite unprecedented in today’s market context,” he says.
In the last five years, Geopagos’ year-on-year growth has been over 75%. However, Núñez and his team felt that it was the ideal time to look for a strategic partner that would really help them to scale.
“It’s time for the company to play in the major leagues. The dynamics of this industry and an excess of capital and liquidity that was seen until 2021, and the speed of the changes that were imposed during the last 24 months, led us to the decision that alone we were not going to be able to multiply and scale,” Núñez says.
Geopagos’ infrastructure processes more than 150 million transactions and over $5 billion in volume annually. Its clients include companies such as Santander, BBVA, Itaú, Fiserv, BAC Credomatic, Niubiz, and Banco Estado de Chile, among others.
Núñez says that, with the capital raised, the company seeks to triple transactions in the next two years. In addition, the objective is also to expand the infrastructure in each of the countries where Geopagos operates, “which implies more connectivity and more options for our direct clients”.
“Latin America is a market with very low card penetration, and Geopagos is well positioned as a software enabler and infrastructure provider to boost card acceptance and digital payments throughout the region,” according to Francisco Alvarez-Demalde, co-founder and managing partner of Riverwood Capital.
Currently the strongest markets for Geopagos are Argentina, Mexico, the Central American region, and Peru, so the goal is to strengthen its presence in the markets it has recently pentrated: Chile and Colombia, in addition to exploiting the full potential of Brazil, the largest market in Latin America, according to Núñez.