SAO PAULO (Reuters) – Brazilian financial technology provider Sinqia SA said on Wednesday it had bought NewCon, a local developer of software for consortiums, in its largest acquisition worth 422.5 million reais ($74.73 million).
In Brazil, companies create consortiums that allow members to collectively save by making monthly payments to buy big-ticket items like apartments and cars. Through raffles, members are awarded letters of credit to make cash purchases, instead of having to pay interest in financing plans.
Sinqia said it had decided to focus on the segment during Brazil’s interest rate-hike cycle, noting that higher borrowing rates make consortiums more attractive.
NewCon serves 80 consortiums created by financial conglomerates, carmakers and other companies, Sinqia said in a statement.
(Reporting by Alberto Alerigi Jr.; Writing by Gabriel Araujo; Editing by Richard Chang)
Copyright 2021 Thomson Reuters.