PayPal Ventures Invests in Ume to Expand BNPL Services

PayPal Ventures has made a strategic investment in Ume, a Brazilian fintech that leverages the Pix payment system to offer “Buy Now, Pay Later” (BNPL) services. This investment is part of PayPal Ventures’ broader focus on international e-commerce and AI-driven companies.

Ume, which currently operates through 6,000 businesses across Brazil, has integrated its services with the Pix system, a popular domestic payments platform introduced by the Brazilian government in 2020. Since incorporating Pix in early 2023, Ume has significantly expanded its merchant base and repeat customer count. The company reports that 85% of its BNPL transactions come from returning customers.

Ian Cox, a partner at PayPal Ventures, praised Ume’s success in capitalising on Pix’s widespread adoption in Brazil, noting that the company is poised to shape the future of payments in the country.

This investment aligns with PayPal Ventures’ history of backing innovative financial technology companies. Earlier this year, PayPal Ventures contributed to a $30 million funding round for Rasa, an AI company serving various industries, and in 2021, it acquired a stake in MELI Kaszek Pioneer, a SPAC focused on fintech and e-commerce in Latin America.

Ume’s strategy aims to enhance payment flexibility for consumers while providing merchants with additional tools to attract customers. The majority of Ume’s transactions, about 80%, occur offline, with merchants paying a fee for Ume credit purchases and consumers typically incurring interest on instalment payments.

With this investment, Ume is set to further solidify its presence in the Brazilian market, offering small and medium-sized businesses (SMBs) an array of financial products to drive growth and improve consumer payment experiences.