Cloud native fintech Pismo has just secured a $108m Series B round led by SoftBank, Amazon and Accel to expand its DevOps services to banks and startups across the world.
While that means squaring off against rival DevOps platforms, Pismo’s new international CEO is bullish about the startup’s chances. That’s hardly surprising given Vishal Dalal joined the banking and payment services venture in February to spearhead Pismo’s international expansion.
But Dalal’s confidence also stems from Pismo’s cloud native core processing platform itself. The platform is designed to give banks, fintechs and other financial institutions flexibility to rapidly launch products for cards and payments, digital banking, digital wallets and marketplaces.
“Competing platforms, even when they offer multiple products, do so through different platforms, which means clients have to deal with different technologies and orchestrate multiple platforms,” Dalal tells Verdict.
“Most importantly, Pismo designed the platform for the new world of digital finance, making it 100% real-time, data-intensive and event-driven. Our platform is the banking equivalent of LEGO blocks; designed to be built uniquely and in-line with our individual client needs.”
The São Paulo, Brazil-headquartered startup was launched in 2016 and has since expanded into the States and into Europe. The company now plans to scale in those regions, despite going up against stiff competition from similar service providers.
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“We are seeing strong interest from our initial activity in Asia and Europe, but we know we must build our reputation globally – as we have in LATAM – through great solutions provided to great players,” Dalal says.
The investors, which also include B3, Falabella Ventures, PruVen, Headline and Redpoint eventures, seem to share his bullishness.
“We are very excited to invest in Pismo,” says Alex Szapiro, head of Brazil and operating partner at SoftBank Group International. “We believe they have a very talented team uniquely positioned to reinvent the technology behind banking, payments, fintech, and commercial transactions.”
Pismo did not provide a valuation for this round.
Latin American fintechs on the rise
Latin America’s fintech ecosystem has lagged behind the US and Europe for many years, partly due to lawmakers and regulators having taken steps in those regions to create a legal environment where fintechs can flourish.
“In South America the story is very different,” researchers noted in the recent GlobalData thematic research report Beyond the Hype – Insight into Digital Challenger Banks. “Countries like Brazil have a history of cartel-like banks operating in highly concentrated markets, with regulation making it almost impossible for new and external entrants to compete.
“This created a situation where significant numbers of consumers in Latin America were unbanked or underbanked, while the main banking players in each country were enormously profitable.”
But things are rapidly changing in South America, with success stories like neobank NuBank and decacorn dLocal having burst onto the global stage in recent years. Arguably, Pismo could be seen as being part of the rise of the region’s fintech ecosystem.
When asked why the Latin American fintech space has grown in the past few years, Dalal believes the growth is down to three factors.
“Firstly, there’s more disposable incomes in people’s pockets, leading to a need for more differentiated services which fintechs do very well at compared to others,” he says. “Secondly, investment in engineering talent which is now starting to pay off – LATAM fintechs are competing ferociously with international competitors on the quality of their engineering and user experience.
“And finally, government regulation is becoming more favourable to the growth of fintech and learning to adjust to sophisticated technological phenomena like the public cloud.”