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Contxto – Even banks aspire for digital transformations, made evident by the Brazilian lender Itaú acquiring 51 percent of Zup for R$293 million (over US$73 million) last week. Specializing in growth hacking and software development, Zup will collaborate with Itaú to develop new digital projects and services for the bank’s clientele.
“This acquisition will accelerate the development of digital transformation projects and offer new features and digital products to Itaú’s customers,” said Itaú in a recent statement.
Over the next four years, the São Paulo-based institution plans to purchase the entirety of Zup’s capital stocks in three installments for a total of R$575 million (over US$143 million). Depending on the startup’s performance, this amount could change.
“The base value attributed to 100 percent of Zup’s share capital is R$575 million,” Itaú added. “Future installments may change to meet certain performance metrics.”
According to reports, Zup has grown more than 30 times over the last five years.
Moving along, during the third year the bank will acquire 19.6 percent of the company. After this, Itaú anticipates buying the remainder for the fourth and final year. Despite the acquisition, Zup with its 900 employees and six branches will reportedly continue to operate independently.
Large database analysis as a service
Founded in 2011, Zup is a software engineering company helping partners grow exponentially via digital solutions. Based on this mission, the startup offers large database analysis as a service. This includes digital strategy consulting, agile development, as well as growth hacking support.
In consideration of Zup’s background, the startup will assist Itaú in undergoing digitization to expand in Brazil and abroad.
Moreover, this isn’t Itaú’s first time pursuing strategic tech partnerships. This past March, the bank also paired up with Google to implement digital payment options. With this, Itaú’s debit or credit card holders can encrypt information through Google Pay, permitting online payments.