RecargaPay - 2022 Q1

  • From the first quarter of 2022, the company only provides financial data under US GAAP (different standard from previous period‘s management financial data). Therefore the quarter-on-quarter and year-over-year percentages only show the basic trends.
  • Gross Transaction Value (GTV) reached at $494 million in 2022 Q1, a 30% increase compared to last quarter, and a 122% increase compared to 2021 Q1.
  • Revenue was $24.74 million in 2022 Q1, a 25% increase compared to the last quarter, a 118% increase compared to 2021 Q1.
  • Gross profit was $13.45 million in 2022 Q1, a 10% increase compared to the last quarter, a 92% increase compared to 2021 Q1. Gross profit margin was 54%.
  • The company’s 2022 Q1 operating expenses was $15. 93 million, a 33% increase compared to the last quarter and a 125% increase compared to 2021 Q1.
  • EBITDA of RecargaPay was -$2.47 million in 2022 Q1. The company’s 2022 Q1 net loss was $9.10 million.
  • As of the end of March 2022, cash equivalents was $11.96 million.

Company Overview

Founded 2010
Sectors Mobile Wallet
Address Sao Paulo, Brazil

Management Team

Rodrigo Manuel Teijeiro CEO
Alvaro Teijeiro CTO
Gustavo Victorica COO
Diego Escobar CFO
Renato Camargo CMO

Board of Directors

Rodrigo Manuel Teijeiro Founder & CEO
Alvaro Teijeiro Co-founder & CTO
Gustavo Victorica Co-founder & COO
Antonio Ruiz-Gimenez Jr. ATW Partners
Roberto Aitkenhead IDC
Henry McGovern McWin S.R.O.

* The Board consists of 6 members. There is one vacancy on the board for independent director.

Current Operations

Corporate Structure (Subsidiaries)

Financing History

Time Round Amount($ m) Investors
As of 2014 A $6.6 DN Capital, FJ LABS
2017-10 B $21.7 ATW Partners, TheVentureCity, IFC
2021-02 C1 $70 LUN Partners, IDC Ventures, McWin S.R.O., Fuel Venture Capital, ATW Partners, Experian
2021-10 C2 $10 IDB Invest, IDC Ventures

Financial Analysis

(2022 Q1 financial data was under  US GAAP standard, therefore the accounting standard and breakdown were different with the previous version.)

Gross Transaction Value (GTV) of RecargaPay reached at $494 million in 2022 Q1, a 30% increase compared to last quarter, and a 122% increase compared to 2021 Q1.

Gross Transaction Value
(in million, USD)

2021-2022 Revenue
(in million, USD)

2022 Q1 Revenue Breakdown
(in million USD)

Revenue was $24.74 million in 2022 Q1, a 25% increase compared to the last quarter, a 118% increase compared to 2021 Q1. In terms of revenue breakdown, installment commissions(“CC Installment”), transaction fees(“Fees”) and loan interest(“Loans”) were the top three revenue contributors in the first quarter.

Gross profit of RecargaPay was $13.45 million in 2022 Q1, a 10% increase compared to the last quarter, a 92% increase compared to 2021 Q1. Gross profit margin was 54%.

The company’s 2022 Q1 operating expenses was $15. 93 million, a 33% increase compared to the last quarter and a 125% increase compared to 2021 Q1.

Among them, selling expenses were $6.37 million, accounting for 40% of the total expenses; product and technology expenses were $6.06 million, accounting for 38% of the total expenses; general and administrative expenses were $3.49 million, accounting for 22% of the total expenses.

2022 Quarterly Operating Expenses (in million, USD)

EBITDA of RecargaPay was -$2.47 million in 2022 Q1.

The company’s 2022 Q1 net loss was $9.10 million.

As of the end of March 2022, cash equivalents was $11.96 million.

Recent Developments

Unit Economics

In Q1, the Company continued to improve unit economics. The monthly gross transaction volume per user reached $189, the average revenue per user (ARPU) increased to $10.4, both of that creating another record high.

Number of Users

In Q1, number of new users was about 286K. The growth rate of new users was stable.  As of March, the total number of active users reached 1 million.

Payment license

In February 2022,  the Company has Central Bank’s green light to operate as a payment institution and was granted the Payment Institution License in the electronic money issuer modality, which allows an institution to manage prepaid payment accounts. The license allows the platform to access other systems of the national financial system, as well as expanding its services. Payment institutions make it possible to make payments independently of relationships with banks and other financial institutions.

Other business updates

New businesses

RecargaPay won state-owned lottery bidding for transparent checkout. This was expected to be available after June, the implementation will allow RecargaPay to offer a similar service to other players in the market.

Partnership

In 2022 Q1, the Company has established partnerships with Lay’s, Intimus, and Perdigão for buy and redeem prize at RecargaPay.

Lay’s consumers can win up to R$ 500 in prizes to use in RecargaPay in this promotion, as well with Perdigão. For Intimus clients, prizes are redeemable for up to R$ 20,00 via cashback.

Awards

RecargaPay was recognized in the Ombudsman’s Award Brazil 2021, held by ABRAREC (Associação Brasileira das Relações Empresa Cliente, a NPO) with the case “Ombudsman’s Mindset: how the voice of the client helps to improve the app experience”.

This trophy proves the Company’s commitment to continuous improvement in service, engaging the team to promote changes that meet the needs of the customers.

Market Overview

Global digital payments

According to FinTech Report 2021 –Digital Payments, which was published by Statista. The Digital Payments segment has a global transaction value of $5,475 billion in 2020. Transaction value of Digital Commerce was $3,467 billion and that of Mobile POS Payments was $2,008 billion. Total transaction value in the global Digital Payments segment is projected to reach $6,685 billion in 2021, reaching roughly $10.5 trillion by 2025.

The graph shows that Global Digital Commerce declined successively from 2017 to 2020, Mobile POS Payments with opposite trend. The transaction value of  Digital Commerce accounts for 63.32% in 2020, and that of Mobile POS Payment accounts for 36.68%.

Total transaction value in the Digital Payments segment 2017-2020 ($,billion)

Global digital payments structure 2017-2020 (%)

Payment in Brazil

Nowadays, the main channels of payments are card, cash, PIX and so on, including:

Card: According to the report, published by Abecs, Brazil’s transaction value of Card (including Credit Card, Debit card and Prepaid Card) was BRL 609 Billion in 2021 Q2, a 52% increase compared to the same period last year, the number of transaction was 7.1 billion, which means 550K transaction per minute, a 52% increase compared to the same period last year. The transaction value is projected to BRL 2.48 trillion in 2021 by Abecs.

Cash: Cash is still the preferred payment method among Brazilian consumers. One main online payment method is Boleto Bancario. Boleto bancário is an official Brazilian payment method regulated by the Central Bank of Brazil, It is a push payment system which was launched in 1993 and today generates 3.7 billion transactions per year(1). Accounting for around 25% of all online payment transactions, it is a must for doing business in Brazil. The payment process for boleto bancário transactions is similar to that of wire transfer or cash payment methods. Customers are provided with a prefilled Boleto Bancario payment slip. At this point, the customer has the option of printing the form and paying it physically at any bank branch or at authorized processors such as drugstores, supermarkets, lottery agencies and post offices. Additionally, it can also be paid electronically at any of the more than 48,000 ATMs in Brazil, as well as through internet banking or mobile banking apps, which are widely used in the country.

PIX: a system which allows fast money transfers over smartphones, has become ubiquitous since it was launched by Brazil’s central bank in November 2020. With Pix, users will be able to complete transactions within a few seconds, 24h a day, 7 days a week. As of November 2021, more than 110 million Brazilian use PIX at least one time, the accumulative transaction amount of this platform was over $89 billion.  ( Source: Bloomberg )

According to Statistics the growth is expected to continue with an annual growth rate (CAGR 2021-2024) of 19%, resulting in a projected transaction value $90 billion by 2024.

[1] https://www.pagbrasil.com/payment-methods/boleto-bancario/

Competitors

PicPay

2012 – Brazil

PicPay is backed by Banco Original, which is a digital bank in Brazil established in 2011. It has developed a set of products (mobile top ups, bill payment, transport) to capture merchants’ transactions through QR-code.

At the end of 2021, the company’s users was over 60 million. Average spend per user in the third quarter grew 80% year-on-year to BRL 1,100.

Financing History

  • NA(PicPay filed for an IPO on Nasdaq in April 2021. But in June 2021, PicPay postponed its IPO plans for 2023.)

Recent News

  • In May, London-based global fintech Unlimint, has announced it is expanding its local payment methods portfolio with the addition of Latin America’s digital wallet, PicPay.

Mercado Pago

2004 – Brazil

Mercado Pago was founded by Argentinian company Mercado Libre dedicated to online auctions and e-commerce. Mercado Pago developed an online payment platform to send and receive money via emails and facilitate transactions with online stores which accept Mercado Pago.

Mercado Pago supports more than 4000 services, and users can shop online or pay for living (telephone, electricity, water, etc.). The company has operations in Argentina, Brazil, Chile, Colombia, Mexico and Venezuela, with more than 100 million registered users.

Financing History

  • NA

Recent News

  • In January, Mercado Libre made a strategic investment in Paxos, a regulated blockchain infrastructure platform that powers the Mercado Pago cryptocurrency experience in Brazil.

EBANX

2012 – Brazil

EBANX is a fintech that offers cross-border payment solutions for global merchants in Latin America.

Payment Solution for 15 Latin American countries and 100+ Payment Methods. More than 500 businesses have been helped by EBANX to expand to Latin America, with more than 40 million Latin Americans receiving global services and products.

Financing History

  • Series A, $30M, FTV Capital
  • Venture Round, FTV Capital
  • Series B,$430M, Advent International

Recent News

  • In January, Ebanx anticipates that it will double its business operations in Mexico as it moves to onboard 10 new retailers and launch its first office in the country with an expanded roster of employees.
  • In February, Bloomberg reported that Ebanx has delayed its U.S. IPO because of market volatility. Ebanx also added former Google executive Paula Bellizia as its new president of global payments.