Ualá Eyes Banking Expansion After $2.75 Billion Valuation

Argentine fintech company Ualá has raised $300 million from investors at a valuation of $2.75 billion, the latest funding haul for one of the most valuable startups in Latin America. The VC arm of insurance giant Allianz has led a $300 million Series E funding round for Ualá. Stone Ridge Holdings Group, Tencent, Pershing Square Foundation, Ribbit Capital, Goldman Sachs Asset Management, Soros Fund Management, Rodina, SoftBank Latin America Fund, Jefferies, D1 Capital Partners, Claure Group, AlleyCorp and Monashees all joined the round.

The deal represents the largest growth equity round in Latin America in recent years and marks Allianz X’s first investment in the region. Ualá plans to utilise the capital to enhance its services across Latin America, particularly in Argentina, Mexico, and Colombia.

“We’re going to use this to scale Argentina, where my goal is to be the largest bank in the country, not just by users but by book,” founder and CEO Pierpaolo Barbieri said in an interview with Bloomberg News posted Monday (Nov. 11).

He added that the company has not ruled out growth in other markets or acquisitions. The funding will also help with “the expansion of business units in both Mexico and in Colombia,” said Barbieri.

Ualá reached a valuation of $2.45 billion in 2021 following a $350 million injection of private funding. The chief executive told Bloomberg the new valuation “shows confidence” in Ualá’s potential, adding, “We’re very proud to be able to show leadership in the region.”

The company will try to reach profitability in all markets before considering an initial public offering in the U.S., he added.

Barbieri said the increased valuation in the latest round “shows confidence” in Ualá’s potential, adding, “We’re very proud to be able to show leadership in the region.” The company will seek to be profitable in all markets before eyeing an initial public offering in the US, he said.

The funding round comes amid a challenging environment for Latin American startups, with investors staying on the sidelines as interest rates in the US remain high relative recent years. The region saw limited VC dealmaking in the third quarter and relatively few recent acquisitions or new public offerings, according to data from PitchBook.

Regional Reach

Ualá, the largest startup in Argentina, has 8 million users. About 6 million of those are located in its home country, a user base that represents more than 17% of Argentina’s adult population. Launched in 2017 with a debit card, the company now offers a series of products including payments, credit, merchant acquiring and investments. Most recently, demand has been “crazy” for dollar-denominated accounts, Barbieri said, with 100,000 account openings in the first five days of the offering, even though only half a million users were given the option.

Argentina’s President Javier Milei attended the announcement at the company’s newly-inaugurated headquarters in the Palermo neighborhood of Buenos Aires. Of Ualá’s 1,500 employees, about 1,000 are located in Argentina.

The company is looking into Milei’s investment incentive plan, known as RIGI, and Barbieri said he expects the company will qualify for the incentives, but declined to give details.

Barbieri also highlighted the potential of Mexico’s market, where the company operates with a banking license since it received regulator approval in 2023, and where it expects to eventually do more business than it does in Argentina. Barbieri said that Ualá would continue to provide a high yield on savings accounts, a tool that’s become a popular way for fintechs to lure savers in Mexico.

“What has been difficult is to underwrite credit in Mexico to people that don’t have a credit history,” he said. “In our case, we’re debit first and we use that data, plus cellphone data, bill-payment data, remittance data and merchant acquiring data to build our own score and underwrite credit.”

The company will also look to expand its offerings in Colombia, where it has about 700,000 users, but is still adding services. “The rate of growth there has been lower because the product suite is not yet complete,” Barbieri said.

The partnership with Allianz also will open space for Ualá to unlock opportunities in insurtech, according to a press release.

“Our investment in Ualá offers both financial and strategic partnership opportunities, which can enable us jointly to penetrate new customer segments, capitalize on growth opportunities, and enhance customer experience,” Allianz X Chief Executive Officer Nazim Cetin said.

(Corrects second paragraph to reflect investment from Pershing Square Foundation, not Pershing Square Holdings.)

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