The news: Brazilian lender Creditas has raised funding and is buying a bank as it aims to increase profitability, per PYMNTS.
More on the deal: The online consumer loan platform raised $200 million and is set to purchase a Brazilian banking license from Andbank, a Brazilian bank with roughly $30 billion in assets under management.
More about Creditas: The 10-year-old Brazilian fintech has continued to take on the country by storm. In January, it raised $260 million, part of which came from major investor Fidelity, and was valued at $4.8 billion.
Super app status? Creditas has been strategically using its revenue—which increased 233% to $48.6 million from Q3 2020 to Q3 2021—to build out its platform.
Creditas has said it desires to be “a one-stop solution for those seeking a digital-first experience in everything related to their house, car, motorcycles, and salary-based benefits.” Its continued acquisitions and new ventures beg the question of whether it’s striving to become a super app.
The bigger picture: If Creditas gains approval for its bank purchase, it will allow the fintech to break into the concentrated Brazilian banking industry. And while that market looks forbidding, Creditas has the ability to disrupt the space through its secured lending arm.
Brazil’s market is also highly profitable. Through its lending operations and increased margins through retail deposits, Creditas could buck the digital bank trend and become one of very few profitable neobanks.
The big takeaway: Creditas’ financials and investor backing look promising, and its ability to connect with Brazilian customers in a unique way will open doors for it to bring on and retain them. But it will need to watch its back, as Nubank continues to build out its super app structure and focuses on reaching profitability after going public last December.