Creditas Expands its F Series, Keeps Valuation, Buys Bank in Brazil

The Brazilian firm’s CEO and founder Sergio Furio told Bloomberg Línea that the unicorn will not become a bank, but will use Andbank to raise capital markets

Carlos Aso, CEO of Andbank, and Sergio Furio, CEO of Creditas.
July 08, 2022 | 07:01 AM

Bloomberg Línea — Brazilian secured lending fintech Creditas is making a $50 million extension, with Andbank and other investors, of its $260 million Series F led by Fidelity in January. The extension brings the amount of the round to $310 million, keeping the same valuation the unicorn had seven months ago: $4.8 billion.

According to Sergio Furio, Creditas CEO and founder, the fintech maintains its goal of a break-even point within a year.

“We are growing 3.2 times compared to last year. Given the profitability, investors have looked at us,” Furio told Bloomberg Línea in an interview.

Creditas’ valuation used to be based on a multiple of six times the capital raised, according to the Panorama of Venture Capital in Latin America study by Endeavor and Glisco Partners. Enrico Del Río, director of Intelligence at Endeavor Mexico, had said that by 2022 this ratio would have adjustments and challenges to maintain. Generally, a startup always raises at a higher valuation, but in the case of Creditas, the round was stable, in a scenario of a more restricted market for venture investment.

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In a previous interview with Bloomberg Línea, Carlos Ramos de la Vega, director of Venture Capital at LAVCA (Association for Private Capital Investment in Latin America), assured said due to the context, the current valuations may be modified and added that “unicorns have to grow to be able to justify this valuation in the coming quarters and put the capital they have to work most efficiently”.

Andorran operation

Creditas’s extension will allow it to buy Andbank’s license in Brazil for R$500 million (US$ 93 million).

“This is not turning us into a bank. It is new funding sources, we will own a bank and this bank will complement our funding sources and deposits to be more efficient in funding, increase margins and reduce the cost to the client,” Furio said.


The Andorra-based bank will help Creditas diversify funding sources and increase its loan portfolio. Globally, Andbank does private banking and has more than $30 billion under management, with more than 70 offices in 11 countries and 1,200 employees. The European group recently launched a venture capital operation to invest in startups, including fintech, proptech and blockchain.

In Brazil, the Andorran bank manages R$8 billion ($1.5 billion) and has a team of around 150 people, with operations in São Paulo, Rio de Janeiro, and Porto Alegre.

Creditas already has an SCD (Direct Credit Society) license in Brazil, but now adds the banking license to expand into the capture of deposits for collateralized loans. Today, Creditas does this by raising funds in the capital markets as FIDCs.

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Even with Creditas as owner, Andbank will continue as private banking and asset management as an independent entity. Furio said that Creditas will not become a bank, but will use Andbank to raise capital markets.


Expanding services

Furio founded Creditas in Brazil in 2012 to offer secured credits to people who could not get financing from banks. Currently, the company offers equity loans, car financing, and payroll loans.

With the transaction, Creditas expects to grow deposits as an additional funding source and will work with AndBank on real estate funds, fixed income, and real estate credit.

The transaction still needs to be approved by the Brazilian antitrust authority (CADE) and the Andorran Financial Authority (AFA), as well as the Brazilian Central Bank.


Creditas also raised a $150 million convertible note to buy Kzas, a home loan marketplace. Creditas is not disclosing values for the acquisition, which guarantees an exit for Redpoint Eventures, which, according to Estadão, was selling its stakes at a time when the fund was dismantled.

“It is an open marketplace for developers to offer to the client,” said Furio. According to the executive, real estate financing is a R$ 50 billion ($9.4 billion) market. For Furio, it makes sense to enter the real estate credit operation to learn, even at a time of rising interest rates. “We have to learn a lot, so the moment to learn is now that the market has cooled down. We will learn little by little to reach the billion-dollar market, long-term thinking to gradually do it right.”

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Today, Creditas is among the 76% of unicorn startups that acquire or merge with a company in their home country, according to Endeavor and Glisco Partners.

The fintech will also apply for the money in Voltz Motors, a manufacturer of electric motorbikes, which recently opened a factory and Manaus. Creditas had already invested R$100 million in 2021 and is now adding another R$ 50 million.


Despite the more challenging environment with higher inflation and interest rate, Furio said the company is growing revenue to R$820 million ($154 million) in the first half, a 3.2 times growth compared to the same period last year.

Bracing for a unicorn winter

The company has over 4,000 employees in Brazil, Spain and Mexico. After Bloomberg Línea ran a story about layoffs at Brazilian unicorns, three people familiar with the matter said the cuts were far greater than the 11 layoffs Creditas reported. According to these people, vacancies and promotions would have been frozen and about 9% of the company -- from 300 to 400 people -- were reportedly dismissed.

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But a person familiar with the matter who preferred not to be identified said that from January to April the Creditas team remained constant and that, compared to last year, the staff grew. The person says that the signings in the last four months have compensated for the departures.


According to this person, since the beginning of this year, more than 100 people have left the company, either by their own decision or because of poor performance in performance analyses. “There are new hires, including some happening before the layoffs,” the person said.

This person also stated that February and March were record months for hiring at Creditas, with almost 600 new employees. In April and May, there were fewer hirings because the company had already made replacements for those who would leave because of the alleged poor performance.

-- Updated article to correct the amount paid for Andbank’s Brazilian operation


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