Picpay CEO Eduardo Chedid on the Rise of Brazil's Fintech Players

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1:37Eduardo Chedid:Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevec on Bloomberg Radio. Eduardo Shadid joins us, CEO of the FinTech PickPay. Eduardo, welcome to the program. Sam, shares ended the day yesterday higher by 5%. They're down today by a little more than 5%. The IPO, the first trading debut for a Brazilian company in more than four years in the U.S. Why go public now and why in the U.S.? All right. So thanks for having me here. Really exciting times for us. Well, PicPay is a large and profitable digital bank that operates out of Brazil.

2:20question why now and why the U.S. Basically, all of our comps are listed here in the U.S. FinTech's not only Brazilian, but from around the globe. So it makes it easier, as well as to access a larger base of investors and capital. As you know, well, we're actually funding a next wave of growth. So that's basically it. We've already reached 66 million clients. Our revenue is$1.4 billion, growing 92%. Net income also growing 82%, 17.4 % of ROE. And we believe we're just getting started. And so that's the reason. You mentioned your peers are traded here in the US. Who are those peers? Who are those competitors?

3:19New bank trades here, Inter trades here, many other, well, Chime, obviously, trades here. So many of those are here, and it makes all the sense for us to do so. Tell us a little bit more about who your customers are in the business. I'm just thinking people who are listening who may not be familiar. Tell us a little bit about, you know, what actually will provide the growth going forward. But just give us some background again about who is going to be using the platform. All right. So, PicPay started actually pioneering instant payments in Brazil in 2012. It became a very large player in the payment space.

4:0111 % of all instant payments done in Brazil either begin or end at a PicPay account. At the same time, we added and became a full-fledged digital bank offering credit cards, loans, salary advances, as well as we have a two-sided ecosystem. So we have a consumer banking and also small and medium businesses banking. And we also offer several other services like you can buy gaming credits or lottery tickets or any goods. You can order food delivery through us. You can also do all of your travel arrangements. I just want to jump in because it's more akin to what you'd find for a consumer in China than what Chime would offer here to U.S.

4:49consumers. Yes, it's actually a larger ecosystem. It's like a financial super app. It's what Elon Musk has wanted to do with X for years and PayPal. But that just hasn't taken off in the US. Yeah, and I think that in Brazil, quite a few digitalization is 94 % of the population. That's higher than the Nordics, which makes it easier. Also, Brazilians in general are early adopters of technology. So it's really, it's been a good journey. But, well, we think that we're just starting. There's competition, though, in this space. And I was looking at another story and company, AGI Inc., AgaBank, Brazilian fintech, fintech as well, also coming out with an IPO valuation.

5:41Tell us, though, how you, you know, as it becomes a more and more crowded space and people's other companies are obviously seeing opportunities as well. How do you kind of beat out the competition or stay ahead? And how do you make sure you can continue the growth rates that you have laid out? I think that what PeakPay is really known for is innovation and product velocity. I mean, if you look at the past five years, we launched at least one product per month. And so that's what keeps us ahead. Like we were actually the forerunners of instant payments in Brazil. And then we also launched the first instant payments, which is installments.

6:20So, buy now, pay later. We launched it in 2014. So, many, many products have been launched and looking directly at what we consider our DNA, which is identifying broken journeys and fixing them through the best digital experience in the market. This is the core of what we do. Forgive me if I misheard, because I know you guys are looking to use the proceeds from this IPO to really expand and accelerate your growth in credit. I think you mentioned buy now, pay later. Am I correct? Yes, yes. We also offer buy now, pay later, as well as credit cards, personal loans. Where's the most growth opportunity for you and the best in terms of the financials and what contributes really the most to profitability for you?

7:10Well, the primary driver for growth, both on the revenue per customer as well as in margin expansion, will be further penetrating that user base with credit products, those being buy now, pay later, credit cards, and personal loans. This is the primary driver for growth, and we still have a vast room for doing so. Well, what are the companies or the areas, not even the companies, but like the areas where you could actually see adding features? Right now, you are this financial super app. You were a digital wallet a few years ago. Where can you still add features and what will those features be?

7:55Like, what does the pipeline look like? Okay, so on our consumer banking area, I'd say that we have a very, very complete suite of products. Now, by design, we focus primarily the last five years into getting the consumer business going. But since 14 months ago, we are extending that same product velocity to the small and medium businesses banking area, which will actually, let's say, take more of our energy in terms of product development in the coming years. Eduardo, we just got about 25 seconds left here, but I am curious. I know you said to Tim, he asked about how this really kind of this platform, this idea hasn't necessarily worked in the United States.

8:45What are the international expansion plans? And again, just got about 20 seconds, just quickly. Yeah, I think that it will be natural for us to expand into other Latin American countries first. At the same time, we feel that the opportunity in Brazil is too large to be distracted. So you should expect us to purely focus on Brazil in the next two to three years. Great stuff. As always, the CEO of PicPay.

9:18The news doesn't stop on the weekends.

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