2025 was a better year for IPOs than 2024. More than 200 companies raised about $33.6 billion, up from 150 companies and roughly $30 billion the year before. Although the tech theme dominated, thanks to the wider AI trade, names from the healthcare, industrials, and energy sectors also made a splash. “More of the same” seems to be the theme for 2026, as the AI buildout gets stronger and stronger.

However, 2026 has not yet seen a blockbuster tech IPO. In fact, among the names that have made their debut on the bourses, the biggest one has been that of the biotech company, Aktis Oncology (AKTS). Following on its heels, another fusion company from the world of fintech is also looking to go public this week.

About PicPay

Founded in 2012, PicPay is a Brazilian digital financial services and payments platform. The fintech was created to simplify and modernize the way Brazilians handle payments and digital financial services, evolving from a pure digital wallet into a broad digital bank ecosystem. It operates as a two-sided, mobile-first financial platform offering a wide suite of services, such as lending, investments, and insurance services.

Seeking a valuation of $2.5 billion, PicPay is looking to raise about $434 million by offering about 23 million shares at a price range of $16-$19 per share. It will trade under the ticker PICS. The company intends to use a portion of the net proceeds from this offering for general corporate purposes, and a portion would be used for the purchase of the insurance company, Kovr.

Notably, PicPay will be the first major IPO in the U.S. from a Brazilian company after Nu Holdings (NU) in 2021. However, is it a subscribe candidate? Let's find out.

Financial Lowdown

PicPay is a profitable company, with increasing revenues and growth in some key operational metrics. Its revenues increased from R$3.46 billion in 2023 to R$5.57 billion in 2024, and for the first nine months of 2025, the company recorded revenues of R$7.26 billion, a rise of 92.1% on a year-over-year (YoY) basis. On the other hand, profits witnessed a much sharper growth rate of 530.2% to R$217.57 million. For 9M25, the figure stood at R$270.37 million, up considerably from the previous year's R$150.85 million.

The rise in revenues and profitability is backed by a parallel increase in the number of accounts on its books. From 52.8 million at the end of 2023, it has grown to 65.6 million as of Sept. 30, 2025, making it the second-largest digital bank, trailing only NuBank. Within the same time period, deposits and total payment volume have risen to R$26.66 billion and R$392.46 billion from R$13.04 billion and R$271.16 billion, respectively. Lastly, loan originations rose to R$7 billion as of Sept. 30, 2025, from R$2.38 billion at the end of 2023.

Return on equity, a key return metric relevant for shareholders in a financial company, improved to 17.4% for the 12-month period ended Sept. 30, 2025, from 14.2% in the same period a year ago.

However, net cash from operating activities turned into an inflow of R$1.57 billion in 2023 to an outflow of R$1.23 billion for 9M25. Yet, its cash balance at R$6.49 billion remained robust enough to withstand any short-term uncertainties.

PicPay: Structural Advantages & Risks

PicPay pioneered the use of QR codes for mobile payments in Brazil as early as 2013, well before the national rollout of the Pix instant payment system. This early focus on frictionless transactions laid the groundwork for what has become a multifaceted super app. The company’s growth trajectory was fundamentally altered in 2015 following a strategic investment from the J&F Group, one of Brazil’s most powerful business conglomerates, which provided the capital and corporate synergies necessary to scale. By integrating banking, credit, shopping, and social features into a single interface, PicPay has achieved a scale that encompasses 65.6 million total accounts and 42 million quarterly active consumers as of Sept. 30, 2025.

Notably, the primary driver of the monetization strategy for the platform is its ability to convert a high-engagement digital wallet into a launchpad for higher-margin financial services. Unlike traditional banks that rely heavily on physical infrastructure and legacy systems, the infrastructure utilized by the firm is cloud-native, allowing it to maintain an efficiently low-cost-to-serve infrastructure.

Additionally, the Wallet & Banking segment serves as the foundational entry point for the vast majority of users. It offers instant payments via Pix, peer-to-peer transfers, and bill payment services. Notably, the integration of Pix, the Brazilian Central Bank’s instant payment system, has been a critical catalyst for transaction volume. The platform currently holds an 11% market share of all Pix transactions in Brazil, with approximately 89 million Pix keys registered on the platform as of late 2025.

Further, a unique differentiator of the wallet is the "social DNA" embedded within the transaction flow. Since its inception, the platform has allowed users to maintain profiles, social feeds, and messaging capabilities, transforming a simple financial transfer into a social interaction. In April 2021, the company expanded these features to include direct messaging, followed by group chats and video calling capabilities. This social layer creates a powerful network effect, as more users join the platform to communicate and pay friends; the utility of the application increases exponentially, driving higher retention and lower churn compared to pure-play banking applications.

Social Banking With a Dedicated User Base

Overall, while its larger peer, NuBank, is often lauded for its user interface and transparency, it remains primarily a functional banking and credit relationship. In contrast, the social integration of PicPay creates a level of daily usage that is rare in financial services. The platform reports that 32% of its active customer base utilized the app as their primary financial services platform in 2Q25. This high frequency of use facilitates seamless cross-selling because the application is already open for social or P2P payment reasons when a loan offer or a retail discount is presented. 

Further, the firm has been an aggressive early adopter of Brazil’s Open Finance framework, which allows for the secure sharing of financial data among institutions with user consent. As of mid-2025, the company held a 12.3% market share in customer consents. This data advantage is manifested in features like "Insights 2.0," which acts as a proactive financial advisor by scanning external accounts to alert users to negative balances or identifying idle savings that could earn higher interest within the native ecosystem.

However, risks remain. Starting from the shareholder level, a defining characteristic of the corporate structure is the absolute control maintained by the Batista family. This concentration means that public shareholders will have virtually no influence over strategic decisions, board appointments, or major corporate transactions. Moreover, the fintech sector in Brazil is subject to intensive regulatory oversight by the Banco Central do Brasil. While the regulator has historically been a proponent of competition through initiatives like Pix and Open Finance, it has also introduced measures to curb the high interest rates associated with credit cards and unsecured lending. Any shift in regulatory capital requirements or caps on interchange fees could directly impact the company's margins.

Final Take

Taking all of this into account, I believe that the PicPay IPO is a “Subscribe” candidate. Why? Its financials are robust and on an upward trajectory. With an added layer of profitability, it is also growing its operations responsibly. Further, it has a moat of not only being a financial app that offers services across the gamut, but it also has a social angle, making engagement with the app intuitive and not bland. Thus, regulatory concerns and concentrated ownership position notwithstanding, PicPay remains on solid ground to continue on its growth trajectory.

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