Payments giant Visa Inc on Wednesday agreed to acquire Brazilian fintech platform Pismo for $1 billion in cash to expand its footprint in Latin America, a vote of renewed confidence in the region amid a funding slowdown.

The Pismo deal is the largest fintech exit in Latin America since Nubank went public in late 2021 and the largest disclosed startup exit so far this year.

For Visa, the world’s largest payments processor, it is its first major takeover since 2021 when it bought European open banking platform Tink for $2.2 billion as well as British cross-border payments provider Currencycloud.

Sao Paulo-based Pismo’s cloud-based platform for financial institutions hosts more than 70 million accounts and transacts more than $200 billion a year, providing the technology through which clients can issue Visa and Mastercard cards.

Mastercard was reported earlier this year to have also been interested in the acquisition of the banking infrastructure startup. It did not immediately reply to a request for comment.

The acquisition comes alongside an 82% year-on-year drop in venture funding in Latin America in May, according to data group Sling Hub, as high interest rates and fears of a recession shook up global markets and rocked tech valuations.

As part of the deal, which is expected to close by the end of the year, Pismo will retain its current management team, Visa said.

The seven-year-old company was founded by entrepreneurs Ricardo Josua, Daniela Binatti, Juliana Binatti and Marcelo Parise. It has operations in Europe, North America, Southeast Asia, India and Latam.

Pismo has raised over $110 million from investors including Japan’s SoftBank Group Corp, Inc, venture capital firm Accel, as well as Headline, which first invested in the seed round and owns about 30% of the firm. (Reporting by Jaiveer Shekhawat and Mehnaz Yasmin in Bengaluru, Isabel Woodford in Mexico City, and Krystal Hu in Toronto; Editing by Maju Samuel, Leslie Adler and Michael Perry)

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