Brazilian digital bank PicPay is targeting a Nasdaq listing in 2025

Brazilian digital bank PicPay will start hiring financial companies to carry out an initial public offering (IPO) in New York next year, according to sources cited by Reuters. This will be the second time that PicPay, a bank owned by the J&F holding, which also controls the meat producer JBS, proposes to list its shares in the US. In 2021, the group made preparations for an IPO on the Nasdaq, but abandoned that plan due to unfavorable market conditions.

PicPay has not formally chosen an investment bank for the consortium to handle the IPO, but plans to hire Citigroup, among others, as the bank has been involved in its 2021 IPO discussions, according to the sources cited.

PicPay and Citigroup refused to comment on the information published by Reuters.

PicPay aims to list its shares on the Nasdaq, a market that for years has attracted IPOs from the technology sector with lower fees and easier listing requirements. PicPay officials haven't made a decision on how much stock will be sold through the marketplace, but sources say they want its IPO to be "as big as it needs to be." One of the sources mentioned that the timing and value of the offer may vary depending on market conditions.

Fintech PicPay sees 2025 as a promising year for an IPO in New York, as the Federal Reserve (Fed - the US central bank) has already started to cut interest rates and the US election will soon be "in the rear-view mirror".

More than raising new capital, the IPO is intended to give PicPay international visibility and access to a larger pool of technology investors, the sources said, adding that the funds raised from the share sale will help expand operations in Brazil.

Headquartered in Sao Paulo, PicPay bank was founded in 2012 and acquired three years later by J&F, which also owns companies ranging from pulp producers to energy firms and consumer goods manufacturers.

PicPay has grown rapidly in recent years as Brazil's central bank has encouraged competition in the retail banking sector.

At the end of the second quarter of 2024, PicPay announced that its net profit for the first half of the year totaled 61.8 million reais ($11.3 million), almost double the figure for the full year of 2023.

According to pymnts.com, Brazil has become a global leader in digital innovation, a phenomenon highlighted by the widespread adoption of Pix, an instant payment application launched by Brazil's central bank in 2023. In addition, the payment/e-commerce platform Mercado Libre it was launched in Brazil in 1999 and is still widely used.

"This adoption is proof of Brazil's strong digital infrastructure, given that two-thirds of consumers own smartphones and 92% have access to at least one 4G network," notes the "How the World Does Digital" report, quoted by PYMNTS.

More recently, notes the quoted source, Brazilian consumers are turning to digital wallets to make payments, with almost half of them using this technology to pay bills.