(Bloomberg) -- A company created in a garage 4,500 miles from Wall Street has become Goldman Sachs Group Inc.’s latest bet to shake up Brazil’s financial system.

Iugu Servicos na Internet SA, a payments fintech that provides billing services, is getting help from the U.S. powerhouse in luring new talent to expand into banking, founder Patrick Negri said in an interview. Goldman’s merchant-banking division led an investment round of 120 million reais ($22 million) in the Sao Paulo-based firm last month.

“We were lucky in the sense that around the same time we tried contacting Iugu, they were thinking of raising money,” said David Castelblanco, a managing director in Goldman Sachs’s merchant-banking division and head of Latin America private equity. “It’s the classic case of a successful entrepreneur building up a company to a point they needed to bring in more people and a financial partner like us to expand.”

Negri, 38, created Iugu in 2012 in his mother’s garage in the city of Dourados, far from Brazil’s financial center in Sao Paulo. It was the eighth business he founded. The first, after he dropped out of school, was a search engine in the early days of the internet. He also created an online phone-book company and a software provider for driving schools.

The fintech firm’s platform helps smaller companies automate billing, saving time with back-office tasks. It recently got a central bank license allowing it to create an account for its clients that Negri said “is something we can use to replace their banks altogether.”

New CEO

Goldman’s money and reputation helped Iugu kick off a hiring spree and bring in Renato Fairbanks Ribeiro, a private equity veteran who was appointed chief executive officer to replace Negri, who moved on to become chief technology officer. Ribeiro was an early investor in the firm and former board member at BK Brasil SA, which operates Burger King restaurants.

The firm also brought in Andre Luiz Goncalves as chief financial officer, and new heads for sales, legal and marketing from companies including Itau Unibanco Holding SA and PagSeguro Digital Ltd. Headcount will jump to 190 by the end of the year, from 80 when the pandemic started, Ribeiro said. Iugu had 40 million reais in revenue last year and is looking to triple that in 2021, according to Ribeiro.

“We need to get our company ready to run, as rivals and banks are moving fast,” Ribeiro said.

Wall Street banks have been eager to capitalize on the fintech fever sweeping Latin America, as upstart firms gain ground against the region’s giant lenders. Other divisions of Goldman Sachs have in the past financed the growth of Nu Pagamentos SA, a seven-year-old company that’s now the world’s biggest standalone digital bank, and have recently loaned money to e-commerce giant MercadoLibre Inc. to expand its credit businesses in Mexico and Brazil. JPMorgan Chase & Co. said in July it bought a minority stake in Brazilian fintech FitBank Pagamentos Eletronicos SA through its strategic-investment unit.

Goldman’s First

“Iugu fits well into the payments and fintech scene that has emerged in Latin America,” Goldman’s Castelblanco said. “It’s a company focused on small- and medium-sized enterprises that solves things they used to do manually or were kind of black boxes.”

Iugu is the first fintech equity investment Goldman’s merchant-banking division has done in Latin America, according to Castelblanco.

Other bets in the region include Uruguayan retailer Tienda Inglesa, Brazilian cancer-treatment provider Oncoclinicas do Brasil Servicos Medicos, and telecommunications-infrastructure company Cell Site Solutions, which it sold to African telecommunications conglomerate IHS Towers in December.

“We liked the Iugu opportunity so much we were willing to get in a little earlier in backing the company than we usually do,” Castelblanco said.

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