Tech Roundup: Méliuz draws attention as cashback picks up in Brazil

You’re reading The Brazilian Report’s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: cashback services gain steam in Brazil, state tax disputes harm the ICT sector, and Brazilian startups gain international recognition.

Méliuz draws attention as cashback picks up in Brazil

As e-commerce established itself as a new powerhouse for Brazilian retail, analysts have been searching for even more ways to surf this wave. The latest bet is on cashback services, a segment that has a clear frontrunner: fintech Méliuz.

• On January 12, Guide became the most recent brokerage to recommend its customers to buy Méliuz’ stocks, with a target price of BRL 30 a share. Ágora and BTG Pactual analysts did the same in December, which helps to explain the company’s 170-percent gain in stock prices since its November IPO.
• According to Guide, as brick and mortar stores reopen, companies will look for ways to retain their customers on their profitable digital channels — and features such as cashback are a perfect fit for this purpose.

Why Méliuz? Founded in 2011 and the only company in the sector to go public, Méliuz is riding solo on Brazil’s cashback wave, according to analysts. 

• Besides its position as market leader, Méliuz boasts impressive figures. In its Q4 operational report, Méliuz reported that its total number of users reached 5.3 million — 152 percent growth on 2019 levels — while the Gross Merchandise Volume (or the total value of products sold on the platform) reached BRL 2.5 billion in 2020, 51 percent more than 2019.
• Another strong suit is the company’s credit card, which offers cashback on every purchase. The product topped 2.8 million requests last year. For comparison, Banco Inter’s own credit card registered 2.5 million requests by the third quarter.
• In a December report, BTG Pactual analysts highlighted that Méliuz has interesting growth perspectives on its own, but could also become a very attractive acquisition target for bigger groups such as Nubank and Banco Inter.

Risks and...