Magma Partners worked as the intermediary, making the acquisition possible since both companies belong to its portfolio. Specifically, Magma is a Latin American VC firm investing in regional startups to help them scale to the United States and Asia.
The company invested in both startups in late 2018. Both were inspired by U.S. payment startup Stripe with QVO from Chile and Kushki operating in Colombia, Mexico and Ecuador.
Oscar Quevedo, Waldo Uribe Fache and Matías Menich founded QVO in 2016. The three amigos met at the University of Chile and collaborated to create QVO. The ultimate purpose of this platform is to accelerate and simplify the online payment process in Chile.
All eyes on Chile
Even though QVO already operates in Peru, Mexico, Ecuador, Colombia, the United States, Canada and Chile, the reason for Kushki’s acquisition was mainly the appeal of the Chilean market.
Aron Schwarzkopf, Kushki’s founder, considers Chile’s market to be among the most unique in Latin America.
“It’s unique because its population is the one with the most demand for digital business in the region,” said Schwarzkopf. “But at the same time, it is one of the most delayed markets in providing payment tools to scale digital business.”
While Kushki already processes around US$30 million a year, the acquisition will surely increase this amount. The company is planning to expand as well as standardize the online payment process in the region.
Payments made easy
Kushki believes that receiving payments shouldn’t ever be difficult for a business.
“Our mission is to reduce the use of cash in Latin America by offering businesses integral technology that is secure and easy to use so that they can make official payments with operational efficiencies while reducing costs,” according to Kushki’s website.
By using the Kushki platform, the process gets easier for business owners and clients alike. The multichannel technology works perfectly for today’s mobile and social consumers since it works with real-time updates. Even better, everything can be integrated over social media platforms.
The payments industry is certainly one of the most, if not the most, active industries in the Latam venture world. You could even say the market is very fragmented and flooded with alternatives. Sometimes this leaves little space for new competitors to earn a decent market share.
However, this transaction is certainly something we’ll see more often in the future. As consumers choose their preferred options and these companies start to grow, we can expect greater market consolidation and big players becoming even bigger via M&A activity.