Bloomberg Línea — Fintech payment infrastructure, the Malga has just completed its first M&A move with the acquisition of Dripa Pix installment startup. The transaction opens a new avenue of growth for the startup, with entry into the B2BC segment with credit to end consumers.
Malga's work is focused on orchestrating multiple channels and forms of payments, connecting different links in this chain, such as providers, payment methods with digital wallets and Pix installments and anti-fraud systems. This happens in a personalized way, so that each of your customers can assemble the structure in the way that is most convenient.
The acquisition of Drip will reinforce Malga's operations, in a strategy of creating an ecosystem and new product conveyors (see more details below).
“Our infrastructure vision envisages decoupling the processing part of all the services that a company uses, from anticipation to reconciliation, as well as anti-fraud and payment splitting”, said Alex Vilhena, co-founder and CEO of Malga.
Throughout the year, Malga recorded TPV (Total Payment Volume) of R$4 billion – annualized with November's figures, the figure reaches R$5 billion.
During the period, the platform says it recovered R$170 million in lost sales. With the model, he seeks to solve one of the biggest headaches for companies, which are denied transactions. According to internal numbers, the average increase in customer revenue is 4%.
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In the portfolio of Malga, formerly known as Plug Paymentsthere are companies such as Petlove, Privalia, JCA, Ingresse and Barte, a payments startup.
Fintech also offers split payments (division of value between different suppliers), card tokenization, transparent checkout, plugins and SDKs (software development kit).
“We have a vision of a payments infrastructure that is coming to fruition, of something completely flexible and modular so that companies can adapt their use at any given moment. I believe that this is what has been driving our growth”, stated Vilhena.
He founded Malga, formerly known as Plug, with Thiago Garuti, COO and ex-Medicinae Solutions, and Marcel Nicolay, CTO and ex-Zoop and Gympass. Vilhena, in turn, worked at Braintree, part of the PayPal group.
MalgaAlex Vilhena (left) and Thiago Garuti, from Malga: acquisition is seen as a way to offer new products and services
This year, the startup recorded a three-fold expansion in TPV and revenue. The CEO of Malga said that he plans to reach the breakeven in the first months of 2025.
The Drip purchase transaction was carried out with its own cash and also involved an exchange of shares. Drip's founders, Patrick McDougall Sterea and Paulo Albuquerque, two former Nubank employees, leave the operation. From the original team, Malga will retain only six professionals.
On the market since 2022, Drip initially raised R$15 million from investors such as GFC, Possible Ventures and Y Combinator.
Last year, it raised R$40 million with SRM Ventures – the venture capital arm of the management company SRM Asset – in credit funding. The sale to Malga provided an exit for all investors.
With Pix in installments, also known by the acronym BNPL (Buy Now Buy Later), a Drip offers the possibility of interest-free online purchases at more than 500 retailers in the country, in brand stores or platforms such as Nike, Boticário, Shein and Shopee.
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Drip has more than 30,000 users in its base, essentially a public with a low credit card limit or who prefers to leave the card for larger transactions. On average, the credit offered by the startup is between R$600 and R$1,000.
“Drip also operates, in reality, a Pix installment infrastructure. You can choose, for example, if you are the retailer, a FIDC [Fundo de Investimento em Direito Creditório] or Malga who takes the risk. There is flexibility also present in the number of installments and in the decision on whether there will be a deposit or not. This has a great synergy with our base”, stated Vilhena.
Within the new structure, in cases of purchases denied due to lack of limit on a credit card, for example, users can enter the Drip credit system, a brand that, for now, will remain.
But this is, according to Vilhena, only an initial gain from Malga's first purchase. In the medium and long term, it will open doors for new products.
“It's like a seed for what we want to offer, with products related to credit, whether for the consumer or for the retailer, such as anticipation of receivables, Malga's own anti-fraud product and credit analysis – because Drip has a low default rate”, stated the entrepreneur.
The startup went into operation in 2021, the year it was accelerated by Y Combinator. During this period, he received a Seed of US$2.7 million, with participation from the funds QED, Verve Capital, Latitud and Norte Ventures. In 2022, the amount was increased to a total of US$6.5 million, in an extension led by Costanoa.
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