Kaszek Leads Z1 Funding Round - LatAm Teen Banking App

Z1 Secures $10 Million Series A Funding

Z1, a Brazilian neobank specializing in digital accounts and prepaid cards for teenagers and young adults, has successfully raised $10 million in a Series A funding round. This achievement follows a previous $2.5 million investment secured only six months prior.

Company Origins and Mission

Established in 2019 by João Pedro Thompson, Thiago Achatz, Mateus Craveiro, and Sophie Secaf, Z1’s core objective is to empower Brazilian and Latin American youth with greater financial independence through its dedicated digital banking application.

Rapid Growth and Revenue Increase

Since April’s funding round, the company has experienced substantial growth. Revenue has increased by a factor of 26, maintaining a monthly growth rate of approximately 40%, as stated by CEO Thompson.

Furthermore, Z1’s customer base has expanded eightfold during the same period, growing at a consistent rate of 30% each month.

Investment Details

The latest funding round was spearheaded by Kaszak, with participation from existing investors including MAYA Capital, Homebrew, Clocktower, and The Chainsmokers. The company had not initially planned to seek additional capital so quickly.

Strategic Partnership

Thompson explained that Kaszek proactively approached Z1 in July, successfully persuading them to accelerate their Series A plans. He emphasized that Kaszek was identified as the ideal partner to support the company’s next phase of development.

Future Expansion Plans

The newly acquired capital will be allocated to expanding Z1’s team across key departments such as engineering, product development, marketing, and customer experience. The company intends to increase its workforce from 60 to over 100 employees within the next three months.

This increased capacity will support Z1’s ambition to achieve ten-fold growth over the next year and introduce new features designed to enhance financial inclusion and literacy among its users.

Free Banking Experience

In conjunction with the funding announcement, Z1 revealed it will now offer its core banking services free of charge. Previously, a monthly subscription fee of $2 was applied.

Impact of PIX

Thompson highlighted the significant impact of PIX, Brazil’s instant payment system launched by the Brazilian Central Bank a year ago. PIX allows for immediate money transfers using identification numbers, phone numbers, or email addresses, without fees.

He compared PIX to “a government-built version of Venmo,” noting that approximately 105 million Brazilians – roughly half the population – have registered to use the system.

PIX and Financial Inclusion

Thompson stated that PIX has been “a key enabler of financial inclusion,” bringing many individuals into the formal economy. Usage of PIX is particularly high among Generation Z, who appreciate its convenience and social features.

Investor Confidence

Monica Saggioro, co-founder and partner at MAYA Capital, expressed her firm’s increased investment in Z1 was driven by the recognition of Gen Z as a growing and underserved market. She believes dedicated products tailored to their needs are crucial.

Saggioro noted that many banks attempt to address too many issues simultaneously, resulting in ineffective solutions. Z1, however, is uniquely positioned to cater to the Gen Z demographic and adapt alongside its evolving customer base.

Founders' Vision and Execution

Saggioro further emphasized that Thompson and Achatz were entrepreneurs-in-residence at MAYA, allowing her firm to witness Z1’s development from its inception and observe its significant traction. She praised their ability to envision, execute, and attract talented individuals.

The Importance of Capturing Gen Z

Nico Berman, a partner at Kaszek, stated in a written statement that Generation Z currently represents approximately 30% of both the Brazilian and global populations. He believes that understanding and capturing this generation’s preferences will yield substantial rewards in the years to come.

Berman expressed confidence that the Z1 team is uniquely equipped to achieve this, given their genuine purpose and deep understanding of this new consumer generation.