Why We Invested in Pismo
We recently announced our investment in Pismo’s $108M Series B. We are true believers in the power of enabling Fintech entrepreneurs access key building blocks necessary to create innovative products, as abstracted services thru APIs delivered in a cloud native architecture. Our early investments in iconic companies like Square and Plaid, gave us a ringside view into the Fintech revolution they helped kickstart in the US and we believe Pismo has a similar opportunity in LatAm and beyond.
We at PruVen Capital are excited about the opportunity to partner with the Pismo team to achieve this mission and look forward to leveraging our deep domain, network and our LP, Prudential Financial's ecosystem to help in any way we can.
With all that being said, we wanted to share a few insights from our deal memo highlighting what we found so compelling about Pismo.
Core Banking Infrastructure is Sticky but Outdated at Nearly Every Established Financial Institution - Legacy providers of core banking and processing systems have developed their technologies in a piecemeal fashion over a number of decades. Due to the critical and entrenched nature of these systems, combined with the change averse nature of incumbent financial institutions, companies switch technology platforms very infrequently (on the order of decades). These factors have resulted in expensive and difficult to update software solutions that are challenging to work with, and slow down the rollout of both internal and external projects. While several startups have emerged to tackle a subset of these problems, we found that many lack the full set of capabilities necessary for large financial institutions, until Pismo...
Pismo has developed an API and cloud-based core banking, issuing and processing software providing a complete platform to power any company’s financial transactions. The Company provides card issuing, digital accounts, wallets, merchant management, and other next-gen payment solutions, enabling clients to design a product that best fits their needs and use cases.
The Market is Ripe for Disruption and Covid Has Only Accelerated the Transition to Modular and Scalable Solutions - Although the core banking and infrastructure software market is crowded, most players offer decades old transaction engines that are continuously patched and updated in an attempt to meet modern banking demands. Those that do offer modern solutions, like Marqeta, Mambu, and nCino, only offer a portion of what Pismo offers, requiring customers to work with multiple vendors in order to build a truly full-stack banking solution. Pismo benefits from being amongst the only specially built, modular, API and cloud based solution that can be deployed rapidly at scale. Moreover, Pismo was designed to meet the needs of financial services companies of any size with pricing that grows with use, lowering the barriers to entry for upstarts.
Demonstrated Product Market Fit With Large Deployments and Sophisticated Clients In Multiple Verticals - Pismo’s core banking system was designed and built in the cloud with banking next generation infrastructure at the core of its design. The Company’s systems have demonstrated impressive scale with its ability to ramp up new accounts quickly and seamlessly. The product is built for both scale and redundancy and is supported by a team of 200+ leading engineers.
Pismo’s impressive traction to date with marquee customers demonstrates that its product is viewed as a preeminent core banking solution alongside the world’s leading incumbent financial software companies including Fiserv, FIS, TSYS and Mambu. The Company’s customers range from traditional consumer/corporate investment banks to market makers and exchanges to leading ecommerce companies building embedded financial products including the likes of Itau bank, Falabella, B3, BTG, N26 among others. With customers in every major banking category, Pismo has seen usage scale rapidly.
Pismo’s Leadership Team has Deep Domain Expertise - Each member of Pismo’s management team has a stellar background and together they bring the right mix of experience to build and scale a leading fintech infrastructure company. Most notably the team includes founders and leaders from Conductor, which was one of the first card processors in Brazil. We’re excited to partner with Ricardo, Daniela, Juliana, Marcelo and the entire 250+ person strong Pismo team as they continue to build a best in class solution powering the next generation of financial services.
PruVen’s ability to help Pismo enter and win in the Insurance vertical - We spent a lot of time with various experts within our LP Prudential Financials’ business in Brazil (POB) to understand use cases and identify areas where the need was acute to drive development of next generation transaction processing infrastructure. We are excited about driving POCs with POB to explore these new use cases (collections from customers, settlements with our agent/broker networks, partnerships with financial institutions like Itau Bank, B3 etc) with the ultimate goal of Pismo growing and establishing itself as a key partner to the Insurance ecosystem.
Pismo represents our first investment in Brazil and Latin America, and we’re excited to continue partnering with the amazing companies being built throughout the region in verticals including Insurance, Financial Service, Real Estate, Wealth/Asset Management and Digital Healthcare.