Bom Pra Crédito raises over US$8.4 million from Grupo Globo via media for equity

Contxto – Meaning “good for credit” in Portuguese, Bom Pra Crédito has recently raised R$35 million (approximately US$8.4 million) in its fourth funding round. Leading this substantial investment was Grupo Globo that purchased minority stakes in the company. 

“We chose Bom Pra Crédito for the quality of its services and due to its already consolidated market position,” said Sergio Lourenço Marques, CFO of Grupo Globo. 

Based in Rio de Janeiro, the firm is reportedly the largest media and communication conglomerate in Latin America. 

“Our goal with the partnership is to further democratize access to credit in Brazil, and Bom Pra Crédito has the right solutions and a team full of experienced professionals to achieve that goal.”

Media for equity model

Based on reports, this investment adhered to a media for equity model. In exchange for company shares, a media company or fund offers advertising space to the startup for marketing efforts. In other words, shares are not paid in cash, but advertisements.

This sort of arrangement is popular among companies that are in the midst of scaling or a high-growth stage. Normally, this entails that the company has stabilized a product on the market and that media is necessary to build brand awareness.

At the same time, Globo has incorporated itself into Bom Pra Crédito’s corporate structure.

While the company already appeared to be in good shape, Founder and CEO Ricardo Kalichsztein welcomed the collaboration. According to him, the new capital will also go towards investing in new lending modalities and offerings.

“Having Grupo Globo as our partner is an opportunity to expand our reach beyond the online world,” said Kalichsztein.

Other plans involve improving its credit analysis technology that leverages artificial intelligence. Enhanced tech capabilities will allow the fintech to serve more loan borrowers. 

This is Bom Pra Credito’s fourth funding round. Prior, the fintech has raised US$29.5 million from angel investors, Astella Investments, as well as Jorge Paulo Lemann from Innova Capital Partners.

Credit as a service  (CaaS)

Using the latest technology as well as data intelligence, the fintech provides some of the highest-quality loans available on the Brazilian market.  

As Brazil’s largest online credit marketplace, according to Startse, Bom Pra Crédito began in 2014. So far, the fintech has 6 million users and has brokered over R$500 million worth of loans among 34 partners. 

By 2022, the fintech hopes to reach R$10 billion worth of intermediated credit while serving 22 million customers. Recently, it wrapped up a Series A worth R$22 million (approximately US$5.3 million) from Innova Capital in October 2018. 

Over the CaaS platform, prospective loan borrowers can receive approval in a matter of minutes, choosing from providers that best fit their needs. If approved, funds get deposited within 48 hours.

-JA