Argentine fintech Ualá launches in Colombia amid Latin American expansion

Mobile payments startup Ualá is kicking off operations in Colombia, its third market in Latin America after Argentina and Mexico.

Buenos Aires-based Ualá, valued at US$2.5 billion in its latest funding round, is launching operations in Colombia after working with local regulators over the last two years to get a licence as a financing company to offer debit cards, said founder and chief executive officer, Pierpaolo Barbieri, in a phone interview. 

“We fell in love with the opportunity of Colombia, an economy where you see tremendous growth and development,” he said. With Central Bank data showing 87 percent of Colombians prefer to use cash, “we believe that digitisaton will go further.”

Colombia has a bustling fintech sector, with more than 300 companies active in the country, according to the local industry association. The ventures are looking to take advantage of the fact that about 50 percent of adults don’t have a bank account, according to World Bank data. Home to over 50 million people, Colombia’s economy is recovering from the pandemic, expected to grow 4.7 percent this year.

Barbieri says Ualá is well placed to tackle the local competition because few focus on debit cards due to the lengthy regulatory process required to launch them, he said.

“To hasten the digitisation of goods and services, we need to first have debit to then build a credit history,” Barbieri said. “That’s why we went the long route of getting a licence and setting up our own operations.”

The local hub has a team of 40 employees led by country manager Natalia Ríos, and the company plans to double its size in Colombia in 2022, Barbieri said. Its upfront investment, already funded by previous rounds, will be US$80 million, according to a statement. 

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. 

The company has issued more than four million cards in Argentina and Mexico, where it’s awaiting local authorities approval after signing agreements to purchase two banks. It expects to reach operational break-even in Argentina by the third quarter, Barbieri said.