Matera raises $100M from Warburg Pincus to help the US catch up to Brazil in instant payments

To say that Pix, the instant payment system created by the Central Bank of Brazil, has been a resounding success is an understatement.

With Pix, money moves directly between core banking systems of different financial institutions. Adoption has been widespread and ubiquitous. The country’s residents have the ability to even pay street vendors using the system through their mobile wallets. As of earlier this year, Pix was estimated to be used by around 153 million Brazilians (around 75% of the population) and 15 million companies. 

The success of Pix has naturally led to growth for companies providing the supporting technology. One example of this is Matera, a Brazilian company that provides instant payment, QR code payment and core banking software to financial institutions. Matera offers software to banks or licensed payment institutions so that they are able to send and receive Pix, assign aliases, generate QR codes and perform other functions within the Pix environment. 

Whenever a Pix transaction replaces a credit card transaction, not only are major payment networks losing market share, but companies helping power instant bank payments such as Matera are gaining market share. 

Pix was introduced in 2020 in Brazil, helping fuel Matera’s growth. Matera says it has grown 4x since then, achieving 30% higher revenue of $77 million for 2023. It’s not common for a company that was founded in 1987 to be growing at such a rapid rate so many years after inception.

And today, Matera is announcing that it has received a $100 million investment from Warburg Pincus, giving the private equity firm a majority stake in the company, TechCrunch has learned exclusively.

Matera is similar to FIS, Fiserv and Jack & Henry, core banking vendors in the U.S. And it’s now looking to grow in North America as well. To be clear, Matera is not offering its core banking solution in North American markets since there are already a number of incumbents doing so. However, it is focused on offering digital twin and QR code payment solutions in North America.

“These solutions help build a more nimble operating model for financial institutions — enhancing a core banking system, but not replacing it,” Matera CEO and co-founder Carlos Netto told TechCrunch. “ Matera hopes to help the U.S. catch up to Brazil when it comes to instant payments but strongly believes that reducing the complexity of legacy systems is the ultimate goal.”

It chose to take an investment from Warburg Pincus because it wanted a U.S. partner to help it navigate and gain access to the U.S. market, Matera said.

The U.S. government’s instant payment system, FedNow Service, went live about one year ago and has been slow to grain traction.

Matera says it processes close to 500 million Pix transactions per month, and with a recently signed deal, that number is expected to soon reach 1 billion per month. It has around 280 clients, including two of the three top global banks, three of the 10 top U.S. banks and one-third of all banks in Brazil. The company’s model has been subscription-based since inception. Subscription fees are generally variable, based on volumes such as the number of accounts, Pix transactions and loan contracts.

Presently, Matera has 1,100 employees, up from about 900 a year ago. 

Henrique Muramoto, managing director of Warburg Pincus, said his firm has been tracking Matera since Pix emerged in Brazil.

“When it comes to having an advanced payments infrastructure, Brazil leads the way as a pioneer country,” he told TechCrunch “And, when it comes to Brazil itself, Matera has been at the forefront as the leading provider of solutions to operate in such infrastructure.”

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