Argentina’s Central Bank has approved fintech Ualá’s purchase of billionaire Eduardo Eurnekian’s digital bank Wilobank.
The deal was finalised Thursday by the central bank’s board of directors, according to a Central Bank statement. The agreement between the companies was first reached in April 2021, making Eurnekian a minority shareholder of Ualá in exchange for the latter acquiring 100 percent of Wilobank, the country’s first digital bank. The Central Bank also approved Ualá’s business plan.
The close of the deal marks another key milestone for Ualá, which was valued at US$2.5 billion in its latest funding round. For the company, which provides a slew of financial services based on a prepaid card managed through a mobile app, the deal will allow faster growth and access to more clients.
The acquisition, which includes access to Wilobank’s bank license, would allow the company to target clients it couldn’t fully serve before, including pensioners and recipients of government welfare. Government payments are made through savings accounts which only banks are allowed to provide.
“We’re delighted about this opportunity because it will allow us to greatly enhance Ualá’s financial ecosystem,” founder and chief executive officer Pierpaolo Barbieri said in a phone interview. “This will allow us to do things in Argentina that are reserved for bank entities.”
Barbieri declined to say how soon the company would seek to launch these products.
With the approval, Ualá can move forward from the memorandum of understanding signed last year and looks to close the transaction as soon as next week, Barbieri added. The company is not looking to raise additional capital and is fully funded following its last US$350 million Series D round last August, he said.
Ualá is also awaiting approval from Mexico’s regulators to move forward with the purchase of ABC Capital SA. The company also launched operations in Colombia in January, where it has a license as a financing company to offer debit cards.
The company declined to disclose the size of the transaction.
Ualá has five million accounts across the region, with four million of those in Argentina. According to Central Bank data, by December Wilobank had over 250,000 savings accounts and had issued over 113,000 debit cards.
Ualá is backed by Japanese conglomerate SoftBank Group Corp. and Chinese Internet giant Tencent Holdings Ltd., along with early backers including the billionaire George Soros, Goldman Sachs Group Inc., Ribbit Capital and Monashees.
by Carolina Millan & Ignacio Olivera Doll, Bloomberg
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