Paytm to enter Brazil’s fintech market with $1M stake in Dinie parent

Fintech firm Paytm is investing $1 million in Seven Technology LLC, the Delaware-based parent of Brazilian embedded finance startup Dinie.

The deal, executed through its wholly owned subsidiary Paytm Cloud Technologies Limited), will give Paytm a 25% stake in Seven Technology. The investment will be executed in cash, with completion expected within 45 days.

The acquisition is part of Paytm’s strategy to expand its merchant payments and financial services model to international markets. Dinie provides digital financial services to micro, small, and medium-sized enterprises (MSMEs) through ecommerce platforms in Brazil.

“This investment would help in understanding the merchants’ business landscape and opportunity in the Brazilian market,” Paytm said in a disclosure to the stock exchanges.

The company has been exploring expansion opportunities in markets with a digital finance ecosystem similar to India’s.

Brazil’s instant payment system, Pix, which is similar to India’s unified payments interface (UPI), has transformed digital transactions in the country. Launched by the Central Bank of Brazil in 2020, it facilitates real-time payments and has been widely adopted across businesses and consumers.

Pix is projected to account for 50% of Brazil’s ecommerce transaction value by 2027, according to Worldplay’s Global Payments Report 2024.

The investment by Paytm is part of its push in the international markets with subsidiaries in the United Arab Emirates, Kingdom of Saudi Arabia, and Singapore. The fintech major will initially invest up to Rs 20 crore ($2.4 million) per subsidiary.

Approved by the board of its wholly owned subsidiary Paytm Cloud Technologies Limited, the latest investment announcement reflects Paytm’s efforts to replicate its India-focused fintech model globally.

Going global

Indian fintech companies are increasingly setting their sights on international markets.

Payment processing firm Razorpay is actively expanding its international presence. It has operations in Malaysia and the Middle East and plans to launch in Singapore soon. Razorpay’s revenue from international markets is about 10% of its total revenue.

The National Payments Corporation of India (NPCI) is also spearheading efforts to take UPI global. Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka, and the UAE have already adopted UPI. NPCI aims to establish cross-border digital payment systems that can facilitate real-time transactions for Indian users globally.

M2P Fintech raised Rs 850 crore in a Series D round led by Africa-focused private equity firm Helios. The funding is expected to accelerate its global expansion, particularly in Africa.