General Atlantic eyes Brazilian lending startup

General Atlantic is reportedly in talks to buy a minority stake in Brazilian online lending startup Geru Tecnologia e Serviços SA.

The US investment firm maybe be joined by other investors according to Reuters, which cited two sources with knowledge of the matter. Geru’s partners have spent the last few weeks visiting funds in San Francisco and New York to raise about $50m, the sources added.

Proceeds from the funding will be used to fund loans and technology projects, one source said.

A spokesperson for General Atlantic did not immediately respond to a request for comment.
Former General Atlantic advisor for Brazil Marcelo Kayath, now a partner at Geru, is leading the consumer lender’s efforts to find new funds.

The Brazilian company enables people to apply for online loans, based on their personalised credit rating. They make their loan application online and the money goes into their account once your application is funded. There is no queue, manager or revolving door and your money leaves in a maximum of 10 days.

Geru charges consumers average interest rates between 36.1 percent and 98.8 percent annually, according to its website, which is much lower than conventional Brazilian banks.

It recently introduced payroll loans, under which employers discount installments from pay checks, in a partnership with French bank BNP Paribas’s (BNPP.PA) Cetelem consumer credit unit. The company charges annual rates of between 25.8 and 29.9 percent on such loans. Geru funds itself by issuing domestic bonds to raise money and lend to consumers.

General Atlantic’s previous foray into Brazilian financial companies includes a 2012 investment in XP Investimentos. XP is an independent full-service broker-dealer serving retail and institutional clients throughout Latin America. Last year, it partially sold the business to Itaú Unibanco Holding SA (ITUB4.SA) in a $1.89bn deal.

In the financial services space, General Atlantic has previously backed Network International. The company provides payments solutions in the Middle East and Africa, delivering a wide range of services that make payment transactions secure, fast, and easy for banks, financial institutions, retailers, and their customers.

The firm has also backed Clip, a leading non-bank merchant acquirer in Mexico, BillDesk, the largest electronic payments platform in India. In January, digital banking solution Alkami Technology closed a Series D round of funding from General Atlantic.

Alkami provides online and mobile banking solutions for financial institutions in the US. It provides a cloud-based platform for retail and business banking, mobile banking, bill pay, personal finance management (PFM), Person-to-Person payments, and marketing, among others.

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