Mexican Bitso intends to invest US$286 million to dominate the crypto market in Brazil

RIO DE JANEIRO, BRAZIL – “The growth of PIX is the clearest testament to how fintechs can change the status quo,” said Vogel, founder of Bitso cryptocurrency platform.

“Brazil is a giant market, and when we think about the crypto industry we think that what’s happening now is just the tip of the iceberg.”

It’s not just words. Daniel is directing much of Bitso’s resources – more specifically, R$1.5 billion (US$286 million) – to implement this growth strategy in Brazil, where it will go head-to-head with Mercado Bitcoin, founded 8 years ago.

Bitso has ammunition: in May it raised R$1.3 billion in a round led by Tiger and Coatue. Other investors include QED, Kaszek, Valor Capital, and Paradigm, one of the world’s most active ‘crypto VCs’ based in San Francisco.

Vogel said he intends to invest the funds over the next 12 to 18 months in improving the platform’s technology, launching new products, and expanding the local team.

Bitso has hired 70 employees since the end of last year (out of a total of 400 worldwide) and will continue recruitment. The platform went online in Brazil in late May.

“I moved here because we think that in the medium term this is going to be our most important market,” Daniel said, who founded Bitso in 2014 in Mexico. The cryptocurrency exchange, which also operates in Argentina, currently boasts 2.5 million customers and is the skyrocketing market leader in its home country.

As its operation is recent, Bitso has not disclosed the number of customers it has in Brazil already, but Vogel said in May that he expected to reach 1 million in a year.

The venture’s main risk has a first and last name: Mercado Bitcoin.

An absolute leader in Brazil, Mercado Bitcoin also has a deep pocket – and it has just gained a major backer. The Brazilian startup raised US$200 million in a round led by Softbank, which took 10% of the company.

Daniel says that Bitso differentiates itself on several fronts.

The platform is more user-friendly; customer service offers multi-channel contact points; and Bitso is the only exchange in Latin America regulated and licensed in Europe, he says.

“We see the crypto market far beyond investments. We have the exchange [to buy and sell cryptocurrencies] like Mercado Bitcoin, but in Mexico and Argentina we already have many other products and services that go beyond that,” he said.

In Mexico, Bitso has a remittance service to capture the flow of funds that Mexican immigrants send to their families. Of the US$40 billion remitted last year, US$1.3 billion passed through Bitso’s platform – 2.5% of the total.

In Argentina, it has launched an account that remunerates the client’s funds with interest.

These two products do not yet exist in Brazil, but Bitso has launched a PIX deposit and withdrawal service, and a real-time peer-to-peer money transfer solution within the platform – similar to PicPay.

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