Don't worry, we speak : Español (Spanish), too!
Not even three months have passed since Ualá closed a $350 million investment round, and it has already put this capital into motion. Today, the Argentinean fintech giant announced it has acquired the Monterrey-based bank ABC Capital.
It is a big step for Ualá, whose latest valuation is $2.5 billion. To date, it has received a total investment of $544 million and is backed Softbank and Tencent, two of the largest Asian investment funds.
Mexico is a key market for Ualá’s international expansion, said Pierpaolo Barbieri, CEO and founder of the company.
Along with the total acquisition of ABC Capital, Barbieri told Infobae that Ualá will invest $150 million in Mexico over the next 18 months. Both operations will allow the fintech company to develop new products and accelerate its growth in the country.
A rescue for ABC Capital?
The acquisition negotiations came at a key moment for the Mexican bank. ABC Capital presented a cap ratio of 9.33% last April –just below the required rate of 10.5% set by the country’s National Banking and Securities Commission (CNBV, for its acronym in Spanish).
In August, ABC’s cap ratio recovered to 14.47%, reported El Economista.
Ualá awaits approval and regulation
ABC Capital’s acquisition is similar to what Ualá did with Argentina-based digital bank Wilobank. In fact, Ualá is awaiting both of these acquisitions to be approved by each country’s regulators: the CNBV in Mexico and Argentina’s Central Bank.
Although it started operating in Mexico in September 2020 and Ualá has already issued 350,000 prepaid cards in the country, the company is still waiting to be regulated.
In October, the CNBV rejected to regulate UnoDosTres, Balanea’s digital wallet, whose services were used by Ualá. The consequence? For the time being, Ualá cannot issue cards in the country.
This is why ABC’s acquisition is strategic, as it helps Ualá to stay in the game and possibly become one of the strongest competitors of Nubank. The Brazilian unicorn which also not received final authorization to operate under the Fintech Law in Mexico.