Argentina’s Ualá to buy billionaire Eurnekian’s digital bank

Argentine fintech Ualá reached an agreement to buy local billionaire Eduardo Eurnekian’s digital bank Wilobank, according to people with direct knowledge of the matter.

Ualá, the mobile payments company backed by heavyweight investors including George Soros, Steve Cohen and Softbank Group Corp, will acquire 100 percent of Wilobank, the country’s first digital bank, the people said, asking not to be identified because the matter hasn’t been made public.

Eurnekian would become a minority shareholder of Ualá as part of the terms of the agreement, the people added, declining to give a value for the deal. Ualá’s press office and a spokeswoman for Eurnekian and Corporación América Airports declined to comment.

Ualá was valued between US$850 million and US$950 million after its last funding round in November 2019.

For Ualá, 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 licence, 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.

Fintech startups have grown rapidly in Argentina as the coronavirus pandemic accelerates the use of digital payment systems. Ualá, which this year started to provide services to small businesses, has issued 2.7 million prepaid cards in Argentina since it started operating in 2017. The company, founded by Pierpaolo Barbieri, also launched operations in Mexico last year.

Room to Grow

Eurnekian, founder of the world’s largest airport operator, opened Argentina’s first digital bank in 2017. According to Central Bank data, by September Wilobank had 240,000 savings accounts and issued over 170,000 debit and credit cards.

Ualá has 675 employees in Argentina. Wilobank had 38 employees by September, according to Central Bank data.