Brazilian neolender Open Co secures $115m funding to boost expansion
Brazilian consumer credit platform Open Co has secured a $115 million investment in a funding round led by SoftBank Latin America Fund.
The round also saw participation from current investors Raiz Investimentos, IFC and LTS.
Open Co was formed earlier this year through the merger of two consumer credit fintechs: Geru and Rebel.
The São Paulo-based start-up says the cash will be used to support its expansion plans and investments in technology and product development.
In Brazil, 52% of the population utilise credit for basic expenses, forming an unsecured credit market worth $200 billion and plagued by interest rates in excess of 300% per annum.
It’s this revolving door of credit, a situation in which more than 60 million Brazilians have overdue accounts or missed payments, that Open Co aims to address.
Open Co aims to finance consumption for Brazilians in a more sustainable and financial healthy way and solve the country’s long-lasting credit problem. It plans to do this using its AI-powered proprietary technology and a unique value proposition combining consumption, credit and financial wellness.
The company claims to have already helped consumers save over $500 million in interest expenses.
“Access to good quality credit at the point and time of need is the single most important obstacle for Brazilians to achieve financial wellness, increase consumption and create wealth,” says Open Co co-founder Sandro Reiss.
“It’s a huge market that is still controlled by incumbents charging extremely high-interest rates, which makes it difficult for people to pay back their loans. It is a vicious cycle; delinquencies are high and interest rates even higher.”