QI Tech becomes Brazil’s most recent unicorn

Brazilian fintech QI Tech announced a $50 million Series B round extension led by General Atlantic, supplementing its earlier $200 million investment six months prior and catapulting the firm past the $1 billion valuation mark.

Hence, Latin America welcomes another unicorn company into its fold, despite the challenges posed by the recent surge in interest rates, which notably dampened valuations for tech startups across the region. Investment firm Across Capital also participated in the deal.

“QI Tech is taking intentional, strategic steps to support our expansion and create a comprehensive suite of financial infrastructure products that better address client needs,” Pedro Mac Dowell, CEO and founder at QI Tech, said. “Achieving unicorn status is reflection of the hard work.”

QI Tech bucks the trend

The Sao Paulo-based Brazilian fintech had already bucked the trend back in October, when it scored big with a $200 million Series B funding round led by General Atlantic as well. At the time, however, the company chose to keep its valuation under wraps.

Now, the company aims to apply the funding to fuel its growth strategy across the region. “We offer a complete infrastructure to enterprsies that seek to offer financial services to their customers such as banking as a service, anti-fraud tools and more,” the firm said.

Established in 2018, the company offers a suite of tech APIs that support different digital produts for its customers. It’s part of a a burgeoning wave of fintechs that have emerged in recent years to create much-needed digital banking infrastructure.

The firm enables banks, fintechs and non-financial firms to integrate digital banking tools such as digital onboarding , facial recognition, credit scoring, digital account opening, wire transfers, Pix payments and credit underwriting.

A market on the rise

The banking-as-a-service market has been steadily expanding in Latin America, driven by the region’s growing e-commerce sector and the increasing adoption of digital banking in economies that were once predominantly cash-based.

The BaaS market is expected to surpass the $2 billion threshold this year, according to a recent study, with further growth anticipated in the years ahead. Market research firm Mordor Intelligence forecasts a steady 7% annual growth rate for the regional industry, driven by rising demand from non-bank businesses seeking to integrate financial services into their offerings.

“We believe QI Tech is uniquely positioned as a challenger to existing incumbent solutions,” Luiz Ribeiro, Managing Director and Co-Head of the Brazil office at General Atlantic, said. ” (It has) momentum to become a leading, diversified player in Brazil’s financial infrastructure ecosystem as opportunities for digital payments and credit adoption continue to emerge.”