Good morning. Thank you for being here. We're very excited about the Bemobi Investor Day. We have lots of interesting information, and we're sure you're going to be blown away. We also have some of our officers who are not usually talking to you, so this is going to be also interesting in that sense. We have a standard disclaimer here. Any forward-looking statements here are not any guarantee of future profitability. First, we're going to hear from our CEO, Pedro Ripper.
By the way, before we get started, these tables are available, so if you want to move forward, please go ahead. As Nicholas was saying, it has been over two years since the last Investor Day. We like this kind of event because usually during roadshows and earnings release presentations, we have to keep it at a surface level. Sometimes we have financial statements or we have overall remarks, but we miss the mark of the connection between numbers and our strategic vision. Sometimes we are unable to really convey our bets and our assumptions. Today we have a longer session. In our agenda, we are going to try and connect these ideas. I am going to be brief in this introduction.
I think many of you know our history well, but I'm going to spend a couple of minutes to talk about where we're coming from because this will help you understand where we're going. We're going to be discussing concepts. I don't want to be preaching to the choir. I don't want to be talking about why AI is hot right now or talking about the payment industry. I want to show you what our lens is when it comes to looking into these topics, which are key for our business. We're going to discuss why we're obsessed with AI and what we see as transformation in the payment methods industry. Again, we're going to be highlighting what it means to us. Now, going from concept to practice, we're going to do something different here. We're going to share a product view.
I'm going to be handing it over to Felipe Godin, our CTO and Product VP, and Lucas Zardo. They will be brief, but they will be talking about the trends that we see, the opportunities that they represent, and how we turn that into products that we offer to our clients. Right after that, João Stryker, our Chief Revenue Officer, will be talking about our strategic vision, the products that we want to deliver on, our starting point right now, and the growth that we expect for these verticals. Finally, with a financial lens, André Veloso will give us a recap of the last three years. He's going to be discussing what we expect for the last year and ahead. Let me give you a brief overview, and I'm going to try and be brief. You know, I find this funny.
We were born out of a spinoff of a company that specialized in payments, so I think this is our destiny. During the spinoff, the company that was actually the subject of the spinoff ended up becoming very niche. We saw the boom of smartphones, and we decided to focus on distribution, monetization, and alternative payments for the mobile gaming industry. This is a huge industry right now, and we had lots of asymmetries at the time. Now, time went by, and now we have the subscription mode. We call it the apps club or the games club, depending on the mix of apps. Again, this was focused on alternative payment methods. At the time, this was basically the opposite of what we're going to discuss now because credit cards did not have lots of penetration in Brazil and other countries where we had operations.
We were looking for other payment methods to make these services universal through microtransactions. Since we had a telecommunications background, we understood that recharging was how this was going to be done, or the top-ups. We started working with lots of carriers, but especially in Brazil and Latin America. We started understanding that for us to have massive distribution in the B2B2C model, we had to understand about digital channels. We were already 100% digital, but we developed a DNA to understand how to create a connection between a business and their end customer, to collect or to talk to them. We had this SaaS structure. This was born when we were working with the gaming industry in apps. We would call this platform Loop. We got listed. This is 2021. We had two or three assets.
Mainly 90% of our revenue came from the distribution and monetization of mobile games. We also had a relationship with 60-70 carriers from all over the world. We had the structure of the digital distribution of apps where we could do cross-selling for other services. We also saw something shifting in Brazil. Traditional payment methods were on the rise, and the role of alternative payment methods was decreasing, especially in Brazil. Our hypothesis was that it would be great to have very accurate, very specific acquisitions, and we had our targets in mind before our IPO, and we wanted to increase our revenue with the customers that we already had. We wanted to create a natural hedging by going into traditional payment methods, quote unquote. We bought M4U. This is a company that we had a spinoff from.
They went to Seattle, and we bought this asset back. This was basically a foundation for the reinvention of Bemobi in the past few years. We also bought a microfinance business from Chile with a strong operation in Mexico, which became very important for Bemobi in the next few years. Now we're nearing the current times. In 2022 to 2023, so three years ago, we started working on the concept of being a specialized payment player in a vertical segment. I'm going to go into details about what this means. We had two acquisitions. We wanted to go beyond our traditional industry. We used to be a company that was very focused on having partnerships with telcos in Brazil and abroad, but we saw that we had other closer industries that made sense.
We were getting into utilities, we decided to go into education, and we chose the long tail of ISPs. We had 7AZ, and Lucas is here. He's their founder. He's going to be talking about a new solution. We have Anderson from Fortaleza, who is here with us online, who operated a SaaS business, which we bought for digital payments for digitalizing schools. Now we're almost at the present time. Recently, we had two acquisitions. We were able to confirm our strategy because we were still, you know, dipping our toe in the water. With SaaS and payments, we decided to double down. We bet heavily on this for the future of our business. We bought another SaaS business, which was called Sinomo, and which is now called Wave. We bought a shell of a company in payments.
The PIX transfer was no longer secondary. It became a main player. It made sense for us to be more vertical there so that we had control over our own IP. Friday is how we were able to do that. We have our proprietary IP, so we do not have to rely on third parties. Right now, our overview is that we have 60 countries. We are still heavily focused on telecommunications and a few other services. We are talking up to five industries, and we had a few dozen clients, but now we have over 1,500 clients. We work with medium-sized businesses at most. We are going to be discussing this concept throughout the presentation, and I am going to try and make it less abstract, especially when you talk to Godinho and Lucas, because you will be discussing projects and products.
The concept of vertical payments means that payments are a part of a longer journey. It starts with the end customer interacting with a business. You have the north interface. However, you have the payment, and then you have the south interface, which is your systems in a business. You have billing, CRM, ERP. We noticed that oftentimes there was friction in payment, but also at the borders of communication between customer and business. Oftentimes, communication was iffy. We understood that we could work on different points of this chain to ensure for smooth communication, and this would make a huge difference in adoption and conversion. We talk about a vertical because we are talking about a software stack. We want to be closer to customers.
We want to make sure we enjoy digital communication, but we can also use ERP and CRMs, and we can understand that for this whole system to work, we need full integration from beginning to end. This is what unlocks value. We also joke around, and we say that a vertical means that we've recognized that in different segments, as an industry matures, things mean different things. E-commerce is going to mean a different thing for a telecommunications business, or for a school, or for a personal care shop. Becoming specialized really makes sense. We don't believe in this out of nothing. We're testing hypotheses. We see how the market responds, and the best way to do it is to go to market. We usually do it with the leaders in a given industry, with the biggest names, where we have lots of scale.
For every industry we enter, we go from the top to the bottom of the pyramid. It's usually the opposite of what other businesses do. At the top, we have a stress test of our thesis. The product is not as segmented when it comes to the ability to replicate it, so we can still customize it. As we become more mature, we turn this into a product, and we have lower costs to go down into the value chain to talk to smaller businesses. This gives you an advantage in this industry. Right now, basically from the biggest utilities in Brazil, we were working with the biggest private businesses in utilities in Brazil, and 12 out of the biggest 15 are our customers. This is a sanity check. We have this thesis of software verticalization and specialization.
I think that the fact that we are getting the biggest clients in each industry is confirmation that we are on the right path. We can also check for that when we look at our transformation. When we became listed, our business was mainly focused on game monetization. We had alternative payments and digital subscriptions. We had a very small share for microcredit. Payment was basically non-existent. It was 3% of our revenue. We also had something with channels and software. Now, time goes by, and in the last fiscal year, we grew the company by 2.5 times. More important than growth is that this thesis is now more robust. Nowadays, almost 60% of our revenue comes from these two business lines, which are relatively new and were not relevant a few years ago.
Now, this is not a guidance, but it is a sign of what we believe in. For the next two years, meaning 2025 and 2026, this is where we believe growth is going to stem from, basically based on what we are doing and what the market can offer. In the last quarter, we have 58% coming from vertical payments and 42% coming from traditional offerings. Now, when we look ahead, we believe that a disproportional part of growth is going to come from the first two verticals. If you double-click on growth forecasts and our potential for growth with João Stricker, we are going to be focusing here. As I said, we believe that 80-90% of the growth we expect is coming from here. Finally, here we have an X-ray of things we do not usually talk about on a day-to-day basis.
We had a significant growth of our workforce. However, since 2022, we reduced our pace of growth, and this is by design. We are going to be discussing operational leveraging and how to leverage AI, which is something more recent. Yes, we are going to keep hiring, but as we create more products or as we go deeper into products, our revenue is going to grow faster than our team. In our geography, three-fourths of our team is in Brazil right now. We have more people in Brazil than revenue. Brazil is a good hub. We have more operational synergies here. We do a lot with a few offices, even though we have folks in 18 countries. These are people who are closer to customers. Finally, we can look at the type of professional that we have. We are focused on generating IPs.
Most of these IPs are connected to tech and products. Around two-thirds of our team comes from tech and products. Finally, since we do not always have the opportunity of being together in person, this is a snapshot of some of our leaders. Many of you know João because you are a part of the early release presentations. He is our CRO. We have André Veloso, our CFO. Many of you know him. Here we have other leaders who sometimes are not in direct contact with you on a day-to-day basis. Fernanda is our People and Culture Director. We have Gardner, who it feels like he has been around for five years, but he has been here for like half a year. He is now helping our team with lots of experience in the utilities industry. He comes from the tech and telecommunications industry. We have Lucas Zardo.
He is one of the newer bloods coming from 7AZ. He was the CEO and founder of 7AZ, and now he's leading two business lines at Bemobi. He is leading the subsegment of access providers, and he knows this in depth because this is how he created his business. He's creating a new area at Bemobi, and he's going to be talking about it today. Felipe Godin is our CTO. Around a year ago, we saw the trend of mixing up product and tech, and this is what we're focusing on with Felipe. We usually joke around that if anything goes wrong at our company right now, we can blame him. Jokes aside, this makes a difference. Peter is not here with us today. He's in Denmark. He takes care of our international business outside of LATAM, a little bit under 30%.
We have Henrique Garrido, who is over there, and he's another founder. He is leading our digital transformation department. He's the founder of previous Sinomo, now Bemobi Wave. We also have Ricardo Santos in the back. Ricardo has taken care of many departments in this company. He was working with products, and now he's working with marketing, partnerships, and strategy. He is one of the biggest people who put together what you're seeing today. I mentioned Anderson briefly. He's also an entrepreneur. We have execs from bigger or structured companies, and we have entrepreneurs from smaller startups. In addition to taking care of this product, he also takes care of our education segment. Finally, we have André Andrade, who is not here today. He's been at Microsoft, AWS, and he also works with digital services. He reports to João Stricker.
Everything that is related to Brazil is led by André. What we want to share is that everyone who is here is here for a reason. We want to strike balance between people who understand about payments and technology, which is our horizontal core, people who have experience in the industries where we are active, and also people who are entrepreneurial with a sense of ownership, but at the same time have this executive flair and are able to take care of a business that may be five to ten times bigger than what we are today. This is our pool of talents right now. We wrap up this brief introduction, and I will try to give you a backdrop so that we can hit the floor in the next sessions. I talked about AI. Hoje, out of 10, eight or nine.
Every 10 talks you go to, 8 or 9 of them talk about AI. I agree with that emphasis. When I was doing my master's, I went abroad to study AI, and I joke around saying that I got it wrong by 25 years because I was 25 years early. In the last four years, what was a big promise has become very promising indeed. For me, here's the art interpretation of AI. We believe that AI is not a hype. You can have like a short-term project for 2-3 years, a project for a 2-3 year horizon, not a 10-year horizon. We do believe that everything we've been talking about will actually take place. This is a priority and not a secondary topic. A few years ago, we were focused on studying AI, but it was not a top priority.
This has changed in the last eight months. We believe that a lot is going to be disrupted, that the world of the business lines will be disrupted even earlier than the physical world. Since Bemobi works with the digital world, digital payments, digital customers, we believe that these are segments that will be hit the hardest first. Those that do not get it will be left behind. For companies that do what we do, we cannot just be sitting aside. You have to lead with all the owners, the burden, and the bonus of doing so. Time will tell. Those that do this well and get things right will have the chance to confirm that the configuration of the different industries. I can assure you that we will see many people exiting and gaining relevance. This is a belief we have.
This is not rocket science, just the way we organize our rationale. We believe that there are three waves that happen more or less at the same time. We will not wait for wave one to be over to start wave two. The most obvious case we have for industries like ours that are digital is the potential in gaining productivity, which is huge. When you use these AI tools, you understand what else they can offer you. The second way is by understanding what we already do today, the type of challenge to solve for our customers, we can use AI to change the quality and the value of what we offer. Once you start doing that, it is like a metaphor. When you are walking among the clouds, you start being able to see what the most structural changes will be.
Some players and activities will lose relevance completely, and then new activities will arise. This is what we're calling wave three. We believe that surfing waves one and two is key for us to better understand what wave three will look like. Let's zoom in on each one of the waves to tell you a bit more about what we're doing to surf those waves. The first wave is about supercharged productivity. This can help all of the positions here at Bemobi. I chose one that is even clearer for you. As I told you, our DNA is people. 70% of what we do relies on people. Our CapEx is intangible. It's R&D that relies on people. Two-thirds of our company are people. They are creating products, creating technological solutions.
We have been seeing that some of the killer use cases that we have been seeing is to use AI not only for coding, but to develop products from scratch at an unprecedented speed and at a test and hypothesis quality that was unforeseen in the past. Let me share a brief video with you. This is our colleagues from technology talking about the coding and product generation market with AI.
What we are finding is we are not far from the world. I think we will be there in three to six months where AI is writing 90% of the code. Probably in 2025, we at Meta, as well as the other companies that are basically working on this, are going to have an AI that can effectively be a sort of mid-level engineer that you have at your company that can write code.
I think our sense right now is this is not a fad. This is not going away. This is actually the dominant way to code. If you are not doing it, you might just be left behind. 03, which is coming soon, according to the same benchmarks, is the 175th best competitive coder in the world. As we are starting to train the successor models, they are already better. I think this is the year that, at least by the competitive coding benchmark, this is the year that AI becomes better than humans at competitive code forever. We are also using AI internally to improve our coding processes, which is boosting productivity and efficiency. Today, more than a quarter of all new code at Google is generated by AI, then reviewed and accepted by engineers. This helps our engineers do more and move faster.
I can argue that part of these executives are biased because they are providing the tools for coding. They are also companies in which coding is a core product, and they have been eating their own dog food. Felipe Godin and I focus on a project on our free times, and we have been working hard to separate what is hype and what is reality. We tried to code with ChatGPT a few years ago. There was gain; it helped us to document coding and to remove one bug or another, but you would hardly change the process on the go. Literally, in the last eight to nine months, with the new models, new reason models, and the amount of tokens that you can pass through a window and the native tools that are now embedded in this, we have seen a quantic loop forward.
Now you can get non-developers to prototype apps in minutes because in the process of iterating a product, it's the value that is hard to measure. The quality and the robustness of the code that is tested, generated, tested, and validated is dramatically better now with AI than without it. If we project a learning curve, if you start using it right now, when this is the only condition, you will already be there. We ran an internal survey six months ago to understand the level of adhesion and use of AI at Bemobi. The first surprise was that it was below what we expected. I checked with our peers at other companies, and we were doing better than them.
It was, at the same time, a wake-up call, and we understood that there was a mismatch because for the most senior developers that work well without AI, they started to show a bit of resistance. We changed our approach. I'll show you a demo so that you understand the day-to-day of a product person interacting with a technology person and the targets that we have self-imposed to achieve by the end of the year. Just briefly, one of the things we do at all times is to try and see how you can remove friction from the payment process. One of the elements of the payment process is to have checkout that supports many functionalities, and it's quite straightforward. This is an actual example. This is a static screen or a design created by a designer, and they are interacting with a product team.
They work with Figma, this design tool that shows flows. This would then go to a DF team that would code this. It would take two to three weeks, and then this would go back to design, to customer, to product, and you would repeat this process and iterate over and over again until you get to a version that would go to production. This animated screen that you see on the right is a real code, a native code that is running on several smart codes. This was generated in 15 minutes. The designer took a picture, an image, and created this in 15 minutes. Of course, this is not a code in production yet. It is not under production, but you shorten the cycle that would take two weeks to two minutes. I will show you this video now.
This is one of the tools that we're making available to our team. On one side, you'll see the image, and we're not going to say anything to the AI tool. The AI will interpret the image, and there will be a semantic understanding. Based on that, they will create a code. The AI will create a code, and it will generate that static image, but no longer as a picture, but as a code that can run on Android and iOS. We didn't say anything to AI. You'll see that there are many prompts or natural language that could be voice or audio or written messages to say, "Oh, I want the user to expand other options when they get here," or create an option to release the payment means.
AI will not only adapt the code in real time as you give the prompts, but also imaging items that are not there will be taken from a repository. You can see the level of autonomy of these apps. It creates elements of graphic interface that were missing in the image on its own. Let me show you this. This is a three-minute video, but we have accelerated it. We have a fast version of one minute only. You see that image, and it generates the first code. It starts with a description. It says, "Oh, when the user clicks on value, I want this to expand to more items." Then they said, "I want to change something here. If you select one, I want it to mark the payment method that has been selected." Remember, this used to be a static image.
Whenever you give a prompt in real time, the AI understands the prompt and updates the code. You can see in real time how the graphic interface is being updated. This gives you real feedback. This is a non-coder. This is a product person doing this. The technology team did not even have to get involved at this stage. At the end, you have a prototype. Just to make it clear, I would not send this to production right away. You have a prototype, and you test, and you say, "If that achieves our goal, should we take this to a client to test? Should we run an A/B test?" This is not the future. This is something that happened four months ago. Literally, eight months ago, this was impossible.
In a period of four months, we took a process that lasted one week, and it now can be done in 11 minutes. Will the company work at a speed that is 100 times faster? Maybe not, but you can interact much more, improve the quality of what you do, and decrease lead times. This is just one example of dozens that we could share with you. This shows the tipping point. We were just dipping our toes in the water, but now we think that we need to take a deep dive into this hole. The time is now. We have established some targets because if we cannot measure, we do not know whether we are evolving or not. Although I gave you a coding example, the impact is across the board. Contract review, NDAs, language translation, some basic stuff.
100% of the company is being trained. They're not yet proficient in AI, but that means different things for different people. When it comes to coding, we have a bold target. We want to have 80% of the coding committed. 80% needs to be either assisted and/or generated by AI. Assisted means you have a developer supervising the process. In other cases, by the end of the year, the code will be generated by AI. We're going to measure productivity not only based on cost reduction, but also on increased throughput. Unlike traditional companies that say, "Oh, now we're going to standardize, and everyone will use Copilot or X or Y," we are still looking at our options. Tools like Cursor that we rely on today did not exist two years ago.
For me, this is the best tool right now in Windsurf, which was acquired by OpenAI recently, is another example. We have adopted eight to nine tools, and I'm sure this slide will look completely different in a year's time. We are just trying out, and we're sure we're going to have good and bad experiences, but we think we should now test them all out. This is what we call wave one. This is a very important way for us to position ourselves for wave two, but we're already surfing wave two as well. Wave two is about taking what we already do and embed AI not only in the way we develop, but also in our value delivery proposition to do something that is materially better than what it was before AI. How do we measure that?
Just to illustrate, something that a payment company does is to improve payment conversion. This is a good metric. If you include AI, you have to check whether you have improved this metric: user experience, less friction, less time to complete payment, and cost optimization. Felipe Godin and Lucas will give you examples of our new product, and they will tell you how they have adopted AI. Lucas will give you an interesting case because this third element not only has AI included in the product, but this is the first product that was created from scratch with AI. In less than 100 days, we went from conception to production with large-sized customers with the help of AI. We got the wave one process.
We created a new service offer, used AI to implement this, and this is in the root of one of the services that we'll tell you more about in a minute. I do not want to give you any spoilers, so let me move forward. Now, let's talk about wave three. We should not be literal here. We should exercise our imagination for two to three years ahead how our industry changed the payment and purchasing process. Google has an annual event called Google I/O. This is an event for developers, and they have shown how search, which is Google's core business, is being reinvented. They have shown a complete journey from search to purchase. We have shortened the video, but this is a person who wants to buy a purse.
They will search a purse and create an agent to monitor the market to get that purse for her. I'll tell you how the e-commerce and payment process happens with this new version that is about to be launched. There we go. Here you can see the user is monitoring this purse. They have searched for the purse before, and they just click on "Buy for me." This is like a checkout that will go to the user. They do not have to enter a payment method or anything else. What happened here in these few seconds of video? They destroyed the e-commerce and payments industry as we know it because the e-commerce store in this case is not even shown to the user, and the payment disappeared from the user's perspective.
You have an agent there, which is Google's smart search, representing the user that wants a purse, and the agent was capable of finding the purse for the user to validate, and the payment was done in two clicks. How will this happen in the real world? Because this is not only a conceptual vision. LLM models, you now can create agents, which are pieces of software with greater autonomy. This software will be built for agents to talk to agents. You have languages and patterns. Google has the A2A model for agents to talk to agents, and these platforms need to talk to each other. We believe there will be two major markets. The first, agents that will serve us as individuals.
You will have major B2C agents, and we have Gemini, Copilot, ChatGPT, and Siri, which is lagging behind, but it can also perform different tasks. We are talking about simple tasks today. They are connected with a chat format, but these agents are gaining autonomy. For these agents to be effective, you have the other side of the coin, and that is where we fit in. These are the agents that in our microcosm will represent the merchants. To create that magical experience, you have to have lots of pieces of information exposed. You have to have a wrapper around your product catalog and e-commerce and the checkout that we used to have with payment methods and the collection process for the services industry.
The opportunities we see in wave three is, although we're going to kill checkout as we know it, there will be a new framework that will enable the B2C agents, which are our focus, to enable these use cases. We focus on service companies. We could be an enabler here for the service companies to offer a more seamless experience when the B2C agents start operating. This is just an illustration, but this can be done with the technology we have today. This is just about combining things and gaining scale. You have a B2C agent. I use Gemini, but it could be any other. This Gemini will be able to communicate with several agents that are representing our agents, maybe an energy provider or a mobile carrier payment agent or a school, and so on and so forth.
Each one of these agents knows the customer information, payment means, and the history of the customer with this institution. In this hypothetical example, you can tell Gemini, "Gemini, I want to pay my electricity bill." Gemini knows that you live in Rio de Janeiro, so your utility company is Light, and they will communicate with us and say, "Pedro, the bill is due tomorrow. This is the amount. Can I use your credit card that has been registered in your wallet?" You say, "Yes, please." The agents will interact with each other, and that is it. Your bill has been paid, and this is a possible future. The arrangement of parts of it, you know, checkout, e-commerce, and this can change in a short period of time.
The companies that are not leading in this market are the companies that will be disrupted. This is not a product for six months' time. We need to understand where this will go so that we can be the best partners for the companies we serve today. To wrap up the session, we will now try to give you more tangible cases in the coming quarters, but we know there's no way out. This is a threat for those who are doing nothing. This creates opportunity to gain efficiency, generate value, and to disrupt the market at the end of the day. Now, let me tell you about the last industry trend that I want to address today.
When we were preparing this material, we tried to understand why we created certain solutions, and we decided to take a step back to see what happened in the resilient payments ecosystem. For us, who are engaged in this on a daily basis, when we take a step back to look at the whole picture, we saw movements that were not as obvious as when we were there creating the product. We want to tell you what we were able to see when we took the step back. Forgive me if there is one or another imprecision, but I just tried to streamline the whole process for you to understand. This is the story of how people paid for anything here in Brazil. We're focusing on Brazil here.
The story may be similar to that of other countries, but we spent almost 20 years with one single way to pay our bills in Brazil, virtually speaking. You had a bank slip, what we called boleto. Brazil is not highly banked, so you had to have something that worked for banked and unbanked people. You basically had one channel, which was the bank, which later became internet banking, but it could be the digital or the brick-and-mortar bank, and one payment method. We lived for 18 years with that single payment method. In the following 10 years, things changed. The boletos or bank slips changed. We saw the rise of DDA, which is a bank slip adapted to the post-internet world. This can be seen on any bank that you have an account with.
This was launched 15 years ago, but you still have a lot of unregistered bank slips. In the utility sector that we work with, more than half of the bank slips are not DDA yet. Credit cards, and this just set the date because this is a date in which many things happened in Brazil. You broke a monopoly. You used to have one brand only for credit cards, and then two. From 2009 to 2010, the monopoly was broken, new players came in, and we established what we call a four-party model. You have the credit cards, the channel, the merchant. Anyway, this brought a disruption to the payments that were made in the points of sale. It also paved the way for online payments.
As e-commerce and other companies created e-business and self-service websites, then you created two different channels: the brick-and-mortar bank, internet banking, and store online. This migrated to mobile more and more. The complexity increased, and that was in the 10-year window. Okay, now let's move forward to 2020 to 2023. This is when the PIX invention was launched. This was here to replace the old DOCs and TEDs, which I did not even include here because this was more for individuals and not companies. It was very successful. Overnight, it replaced DOCs and TEDs, which are the electronic funds transfer. I mean, consumers are usually faster than companies to adopt technology. Even for PIX, we saw this happening. First, individuals started doing this, and then the companies. It was fast, but still lagging behind individuals.
Although PIX exists for five years now, the bank slips still account for like 50% of the payments. Yes, companies do lag behind individuals. That was in two years. Now, let's speed up, and things will get more complex. In another two years, you had a few more transformations. Credit card brands, when they saw the evolution of PIX, were also evolving their rails, their payment structure. They made many changes. They tried to make online transactions as convenient as other transactions. They also created the click-to-pay structure. They created other convenience and safety structures, tokenization, the passkey, 3DS, so that credit card transactions were even safer and different from the PIX transfer because of chargeback and logistics security. This adds lots of complexity here. At the other end point, you start to dematerialize the POS, so any smartphone is able to receive payments.
Meanwhile, and we're talking about 2023, we had the wallets being created for physical assets. They existed five years ago, but here they started being used online as if they were bundling credit card payments so that we eliminated friction and we didn't have to register with every shop, with every store. Of course, again, the fixed transfer was heavily and quickly adopted. Now, turbo ahead, and in a year, this is what we could expect. At the top left, you have the digital wallets. In the past, this was a wrapper heavily focused on debit and credit cards. Google is spearheading this in Brazil. They are starting payments.
We have a dotted line with PIX and Open Finance so that you can associate your PIX account with a Google wallet so that you can make a purchase with the wallet without the copy and paste to go to a bank. PIX is also turboing forward, and with Open Finance, you're able to open up lots of different opportunities which are not located for it by the original PIX. You have recurring PIX payment, the automatic PIX payment, which was launched and disclosed yesterday. It's going to go into operation in nine days. We have the smart PIX, so we're going to use the same individual entity number with different banks. We have other options here. Something that has not been launched yet, which is not a payment method, but will have impact on payment methods, is the tracks structure framework.
Payments will only be released after checking for a contract, and this is going to make for that to be easier. For cross-border payments, we are also going to be using crypto. We did not use this asset for transactions a lot, but this now plays a role with stable coins. Finally, we have WhatsApp. WhatsApp was already dipping their toes in payments, but they have a very good initiative now. They are now more payment-friendly. WhatsApp Pay is a series of APIs and standards so that you have another big channel which is going to lead the way here. We were picky that there are other things that we did not include here. Our take-home message is that this is going to be heavily accelerated. Now, this has a pro, a challenge, and a responsibility. The pro is that from a client's perspective, this is amazing.
You have so many options. You have better payment methods, you have less friction, and you can pay for things however you want, whenever you want. As soon as all of these technologies are available, it is undeniable that we're going to have a better structure here. I was talking about adoption for B2C, and this is very quick in Brazil. Brazil has a good appetite for testing out and adopting the technologies. This is applicable to social media and also to payment methods. However, life's not easy. If you look at most businesses, they like the idea. They say, "Great, automatic PIX transfer. This is going to reduce my costs with bank slips. I'm going to spend less with collections. I'm going to have better conversion rates.
Maybe my account receivable are going to be lower, so my working capital will be better. Overall, businesses look at payment methods according to this lens, which is good, real, whenever you implement it properly. However, there is a big gap in real life because this is very complex. We needed 10 minutes for an overview with this light, let alone to implement all of this. At the end of the day, there is a mismatch here. DDA transfers have been around for 15 years, and we still have lots of bank slips which are not DDA-based. The PIX transfer has been around for five years, and even though the population has heavily adopted it, in some industries, 50% of payments happen with bank slips. Wallets have been around for six to seven years, but only a minority of people use it. Now, why is there a mismatch?
This is not hard to understand. You have to integrate this to your structure, to your CRM, to your accounts receivable, to your accounts payable. The ecosystem we mentioned is not a one-stop shop. You have six to seven players that you have to organize so that everyone is able to play this game properly. Most companies do not have an army of 300 to 400 people with the right know-how who were doing research on this all the time. If they do, this may not be the best CapEx allocation to do it in-house. This light was created by myself as an individual. I would like to say that the future is here, but it is not well distributed. We have businesses that came to be from zero digitally. A digital journey is their core. They do not have as much legacy. This is their core business.
They are literally betting billions to be early adopters and to come up with a beautiful digital experience. However, if a user is getting food delivered or getting an Uber ride, they are also paying for their power bill. They are also topping up their phone. This is a mismatch. I'm not going to say NASA, but sometimes you have a SpaceX-like experience. Sometimes you have companies that see the value in that but are actually trying to manage the complexity. This is what we call the digital payment gap. Things are available, but only a few businesses are able to enjoy that. For 99.9%, probably 99.99% of companies, there is a mismatch. You go from a SpaceX-like experience to a very crude experience, which is not as easy and not as friendly. This creates friction, but on the other hand, it also creates opportunity.
I'm going to talk about why we believe that we are one of the best players to do this. Think about this. We have new standards. Users have given us their vote of confidence. They've shown us what they adopt and what they want. We also have industries that want to make clients happy. Many of these industries are client-centric. At the end of the day, they need help to close the payment gap. When we go vertical, we pick some companies, we understand their pain points in depth, we understand these standards in depth, and we figure out how to offer a best-in-class experience from a digital native to the other 99.9% of the economy, which are not enjoying that right now. This is close to what we want to achieve. Now, why us? Think about what is happening in this ecosystem.
Technologically speaking, we have this game which is fast-paced, and we're trying to play the game at the same time in a collaborative way. Think about offer, or think about supply. Supply is focused on the players to the left, which have played a fundamental role in making payments universal. A few years ago, one of the biggest transformations with credit cards was that we had horizontal acquirers. Most of them came from spinoffs from banks. Some of them were independent. I say that they are horizontal because the solutions that they offer could be working for a beauty salon or for a university with 20,000 students or a telecommunications with thousands and thousands of customers. The solution is actually very similar to all of these, and it is up to the client to put something together for them. Now, this is a competitive industry.
We want something good for both businesses and customers. Margins are low. What we see companies doing is to reverticalize their operation, not as we do with industries, but as in reintegrating their payments with other banking offers like recurring credit and payments. They were seen as independent in the past, but in the past few years, we have seen consolidation. Many of these companies are being reintegrated into their previous banks, or they are becoming something else like PEG Bank. Now they have credit for small retailers. This is good. This is valid. This is also competitive for a mid-market. These companies are going to keep their relevance as a minimum common denominator. This is a clear movement. In the past, we would clearly see where the market was headed. You had one big player. They would pivot. They would sell their software.
I don't need to name names, but this was the strategy for a big horizontal guy, and it was hard for them to implement it. The rest of the industry is trying to look for specialization. One of them was really successful. It's not our case. They found a problem for a niche for companies operating in many countries. If you are a SaaS business or a digital distribution business, you operate in 80 countries. You have no legal entity in all of them, but you have to collect money in these countries. You have global payments or cross-border payments. At the end of the day, you have good margins because you tackle one pain point for the players that are more commodified with lower margins because they are unable to do it. It is one way of becoming specialized.
Finally, as we have a more sophisticated market that is very fast-paced, players at the left are no longer the priority. Solutions are very similar to what we had six to seven years ago because the value that they offer is different. These players are not going to be experts on one single country, not as intensely, because there is coverage and they want to make it easier. We have other companies that are going to choose their specialization. Either it is going to be a macro specialization, and they are going to be leading the payment industry, and they are going to close the gap. A company is going to take six months or a few months to adopt something instead of 10 years, or they are going to become specialized by understanding very specific problems.
We see ourselves here as specialized payment providers, and we believe that we are very well positioned to close this gap. Of course, we are not the only ones. Other companies are going to use other segments, and they are going to do great things. We are going to be able to cross this metaphorical bridge that we are talking about. I am almost wrapping up, and I am going to be handing it over to Felipe Godin. In the next session, you are going to see a product. This product is aimed at organizing this mess. Through our solutions, we are going to help some specific clients for which we know their pain points, and we are going to help them accept every payment, maximize conversion, and simplify management in a cost-effective way. At a minimum, we want to unlock more value than costs so that choosing us as a partner is an obvious choice.
Finally, this is an ecosystem, right? With an ecosystem, of course, we need partnerships. We need collaboration. I know this is commonplace, but this is a penny that dropped for us three years ago. It really makes a difference for us to have a close conversation with the other links in this chain because at the end of the day, we want to be the glue that brings it all together. Let me give you a few examples that made a difference in our journey, and it's going to make a difference forward. We were very passive with the credit card brands, but now we're closer to them. I have Mastercard. They are great partners now. Felipe Godin is going to talk about tokenization, security, 3DS. This has been very useful because now we have access to where the ball is going to.
When we have a new technology, we're ready to launch. This is also helpful for us to communicate tech benefits to the market. Being close to these players has been key for us to be able to push this boundary forward. We also have two big techs which dominate user devices. We were passive with them before, but now we're very close to Apple and Google. Google is here. They are partners of ours, and they actually show up two times here. Google owns the most used device in Brazil, Android, and it is the wallet that reaches more people.
We are one of the first players to accept biometric PIX payments, which was just launched inside Google Pay. This is an example that Felipe will be showing. Without this kind of partnership, we would have access to that in three years, most likely.
Now, acquirers are here as a different kind of player, but actually, there's lots of symbiosis. As this industry gets more mature and specialized, I don't have to do the basic service at scale because they do it really well. They have scale. They are competitive. They don't need to be experts. They don't need to do it all on their own. We have a relationship with many of these acquirers. It's not only about having a partnership for supply. In some of our cases, we have verticals that are also their target, and we are actually tackling them together. It's not about the competition. When I go with them, I make sure that they are the acquirers behind us, and they make sure that I can go into new accounts with existing relationships.
Another company, which was not as obvious, is Meta, and now they are partners of ours. They own WhatsApp. We are going to be discussing WhatsApp later. WhatsApp is really connected to improving relationships between end users and companies and how to have the best payment experience between companies and individuals. We have been working a lot with Meta. We want a better integrated payment journey, and we want to be an official partner to be able to deliver that with autonomy. Everything we are discussing here is based on the cloud. We have AWS and Google. We do not necessarily have a partnership here, but with the PIX world, we have a regulated structure with the Central Bank of Brazil, and this is what we do. All right, I am one minute over, and I am going to be handing it over to Felipe Godin.
In summary, we have all of these trends, but now we're going to go down deeper. We're going to see the backstage and how it works under the hood. You're going to see what the products are, and you're going to see the user cases that were not possible in the past without these products. When João Stricker speaks, he's going to be talking about the addressable market and where our solution fits. It is our market view added to the pain points that clients have that lead us to our product strategy. This also gives us a clear way forward. We see our serviceable, addressable market.
Godin, please go ahead. Bom dia, pessoal. É prazer enorme estar aqui com vocês.
Hi, good morning. I'm so happy to be here. We're going to be discussing our payment platform called Bemobi Pay.
This is a very broad platform tackling every stage of the payment process. Today, we're going to zoom in on three elements of this platform. We have the smart checkout. This is when users actually interact with the platform. It is their point of contact with the platform. We have payment orchestration, which is under the hood. This is invisible to users, but it enables many of the things we're going to see today. Finally, we have our youngest daughter, Grace. Grace is our conversational payment platform based on WhatsApp and new LLM models. Let's start with the smart checkout. The smart checkout was created to close the gap that Britta was mentioning. We have high expectations from clients. Consumers expect a smoother experience when making payments. We've brought the bar up. However, payment complexity has also gone up.
If a company is not specialized in payments, it is harder for them to actually meet user expectations. Through the Smart Checkout, it is easier for companies to deliver on the experience that people expect to have. They can support every payment method in existence and every future payment method. They are able to deliver a superior experience through the white label approach. There is also consistency among different channels. This is the omni-channel approach for a checkout. Throughout this experience, we are using AI to make payments simpler and to make for a better process. At the end of the day, this leads to better conversion rates, increased customer satisfaction, and the outsourcing of all this complexity.
Not only the investments that are required to put this journey together, but also operational complexity under the hood so that we have a very robust payment structure. Let's watch a clip of what the checkout experience is like, and then we'll be able to double-click on some of the aspects of this product. Agora, dando zoom em alguns elementos da solução. Now let's zoom in some of these solutions. First, we have an omni-channel. End customers who are more digital are already used to interacting with these businesses through different channels. Right now, we have a smart checkout, which ensures consistency and security in every channel. To your right, we have more traditional channels like POSs or totems. These are used with a physical credit card. Then we have mobile channels. We can use them on a browser or on the phone.
You have the mobile web or you have apps. You may also have the available interface like notebooks or tablets or even desktops. Finally, we have more conversational platforms with WhatsApp, SMS, and RCS. You also have integrated chatbots here. A different interface here is during service when somebody calls a call center or when a collection agent approaches somebody. At the end of this process, we finish the transaction in one of the previous channels. What we usually witness is that companies are focused and specialized on a part of this experience. Sometimes they are specialized on physical terminals, some of them specialized on the mobile checkout experience, or they may specialize in collection. What is special about Bemobi is that we are present in all of these channels, and we are able to offer a consistent, safe experience for our partners.
Next, what's interesting about this platform is that a checkout is usually embedded in a website or app. A checkout needs to work as the app or as the website. With the smart checkout, we have a white label offering. This means that this is fully, fully adaptable not only to the brand of our clients, but also their visual guidelines, their color. It fully integrates to their websites and apps. Through the smart checkout, we can offer every payment method we have right now, the main payment methods. According to our indicators, we see that it does make sense to offer more options to end consumers. They will be able to pick the one that's most convenient to them, and this has a very good positive impact on conversion. To our left, we also see that it's not about the number of payment methods.
We're using AI and machine learning with historical data. We're offering the payment methods that lead to a higher likelihood of a better experience, of a seamless experience with higher conversion rates. Finally, we can combine multiple payment methods. Not only multiple payments, but you could mix up a card and a PIX transfer. We see that in reality, this leads to higher conversions. Usually, you have denied transactions because of the limits of credit cards. Usually, we have lower limits in Brazil. When you have multiple payment methods for one single transaction, you see a considerable increase in the conversion rates for these transactions. Now, let's zoom into a more recent issue. Think about your purchase experience in apps. We're usually interacting with very big companies. They invest heavily in their care or customer service apps for end users.
We've noticed that there's so much frustration here. They invest so much. They think about every single detail. They think about the font size. They make sure it's a seamless experience. With the payment methods, they didn't have lots of options. They usually use checkouts that are created for the web and not for apps. There is a clear gap between the experience up to that point, which was seamless, and as of the moment, they use the checkout for the web in an app. These companies would try to control the experience a bit more. They were trying to develop a purchase experience. They would look at a payment structure as an API, something that is in the backend. As Pedro was showing in the payment map, we have lots of complexity right now.
The companies that chose this option, as they try to evolve, start noticing that the complexity is not only in the backend, but it's also in the front end. You have Wallets, Google, Apple, Click to Pay, 3DS, the Open Finance system, PIX, Biometrics. There is a lot of integration effort required at the front end, and these companies would have to develop this from the bottom. This is why last year we decided to build a new version of the checkout, a version that specializes in apps. For most native apps for iOS or Android, the smart checkout will be available. We also have the reactive nature and Flutter technologies. This is a much, much better experience. We have SDKs that are very easy to integrate. These SDKs were made by developers for developers. We are focusing on developers.
We're focusing on their experience when integrating SDKs. So based on the SDKs and the checkout, we are actually able to offer a much better experience specifically for apps. You have lots of layers of customization. Our goal is to offer an experience that is in line with what our original app offers or what the original host app offers. Here you see an example of an app that was done really clearly. You know, it's clean. You have big fonts. You have good spacing. And it's clear that there's a transition between the original app and the payment platform. Look, this is the payment. When they click here, we see the Smart Checkout. This is aligned with their visual guidelines. It's very seamless. And it removes the complexity of the purchase process through a simple integration.
There's another advantage to this new product, which is based on the SDK integration. We're able to have better integration with the OS, with the native system used in the phone. You have a better experience with the wallets, which are heavily integrated to the OS. You can also use the biometrics in your phone, which are key for the biometric Pix, for instance. This is another example of something I mentioned earlier about how abstracting payment methods through a checkout or an SDK will also prepare you for the future. Pedro mentioned that the Central Bank of Brazil launched a new Pix modality in Brazil, the biometric Pix on Open Finance. That was back on February 28, 2024. Bemobi has approached this in two ways: by purchasing a license to become an initiator or through our partnership with Google.
Through this partnership, we had easy access to this new PIX modality through Google Pay. We integrated this into our SDK and made it available to our customers who were already using the SDK. They only had to update the version, and the feature is now available for the customers who adopted the solution. This is a top-up example of a cell phone carrier. The customer chooses how much they want to top up, and they click on the button to continue. The pop-up will be shown offering the best payment methods for that context. The end consumer will then choose to pay via PIX, biometrics, PIX on Google Pay, and the SDK will open the Google Wallet. In this case, the new bank account is linked, and they validate the biometrics, and the payment is done.
The top-up is available on the customer's mobile right away. This is a much more convenient process. You do not have to copy the PIX code, open the banking app, log in, paste the code, pay, and then go back to the app to see if everything runs smoothly. Here, everything happens within the Telco app. A very seamless experience, an effortless transaction for customers who have SDK. Finally, here, I want to share with you a new feature that is under development, and it is part of our roadmap for Q4. This is part of Bemobi's obsession with reducing friction. Although we already offer very convenient offers: Google Pay, Apple Pay, P2P, there is still a group of users that would prefer to type their credit card in the form. This is a friction. It takes time.
You have to type the numbers, the expiration date, and this happens only once for each merchant that uses the checkout. When they come back to pay like a utility bill or school tuition, there is no friction because the credit card has already been saved on Bemobi's wallet with the tokens, cryptography, and the whole PCI that makes sure the transaction is safe. Whenever they interact with the website of any establishment that uses the checkout, they will have to type their credit card number again. In recent years, we have seen that as we increase our coverage, working in new industries, we started with telecom, then utilities, and now we are also in education, we can see the same user moving from one sector to another.
This is what we call a multi-industry user, and we can measure how much we can reduce friction if we could offer them a chance to reuse the information they have typed earlier. Of course, this is in a safe way where they're opt-in, when they're logged in. The goal is to remove this step and decrease friction when typing in a credit card. We have Stripe and PayPal already using this with interesting results, and our team is now working on this. We see that this indicator of how much the user moves from one company to another is quite high, so we can estimate friction reduction gains by doing so. Our team is working on this. We plan to launch this in Q4, and I will later be able to share some of the results with you. Now, let's talk about the payment orchestration.
This is running in the background. It cannot be seen, but it has a key role in our payment architecture. That is why it is here, right in the center, representing our brain. I will show you how this works with some examples. As the name says, this is the orchestrator. It communicates with several other elements. One of the elements is our payment gateway. Its role is to integrate with the other players of the payments ecosystem, either the acquirers or the brands, the wallets, credit card brands, the PIX and Open Finance ecosystem, the banks, because many of them also have closed-loop solutions. It is through the gateway that we integrate with all of them. It is the orchestrator that will define when to use one or another, when to apply a new attempt policy or a fallback policy. I will give you further examples later.
It also communicates with our wallet. That is where we store the credit cards with cryptography and user preferences. Finally, here you can see our installment options. I will zoom in to this in a future slide. At the foundation of everything, security and prevention. A few years ago, we invested in an anti-fraud solution for security and prevention of frauds. My first example is a spot payment, a one-off, non-recurring payment. This is a recent case, a natural case. We started a relationship with a customer that already had a solution, but they wanted to evolve the experience that they delivered to end consumers. They wanted more payment methods. They wanted to enable recurrent payments, and they wanted to offer installments since they already had an experience with an acquirer.
I mean, spot transactions would be sent to this contract where Bemobi acts as a gateway, but the processor of the payment itself is the acquirer. This is a credit card transaction, a Mastercard. It was routed through the orchestrator that performs this dynamic router based on the characteristics of the transaction. We set up that spot transactions that are not installment payments would be pre-processed by prior commercial conditions. They have this contract with the acquirer and the commitments. BYOB means bring your own processor. GetNet would process and settle the transaction in this case. The other types of transaction, either if they were not supported in this model, wallets or installments, would be processed by Bemobi in its role as a sub-acquirer and payment processor. Internally, we have rules that aim to optimize cost.
In this specific case, we set up the platform so that transactions that were to be paid in two to four installments had to be processed with our relationship with Rede as a sub-acquirer, and the cost would be sent to the merchant. The merchant wanted to offer installments without creating any burden for the end consumer, so they would absorb the cost. In this case, you have the exclamation point, a warning sign here in yellow, and it did not go through because of platform instability. There were many links in the chain, and the orchestrator plays a very important role here. They decide to retry the transaction respecting the retry policies of the payment methods, and then the transaction is converted in a transparent way to users. In certain decisions, we route the transactions that are to be paid in five installments or more to Cielo.
We have this contract with, we are the sub-acquirers here with Cielo, and I'll give you further details about how the installment price is covered by the end consumer here in this case. Here, the transaction did not go through. In our practical experience, we know that in many cases, it makes sense to cascade from one acquirer to another. This creates a small increment in the conversion rates, but this is a way for you to add value. We routed this to GetNet as a secondary acquirer, and then the transaction went through. This is an example of how you can optimize transaction cost with dynamic rules at the orchestrator. In addition to optimizing cost, you also create more resilience to the whole payment process. Now this example focuses on recurrence optimization.
Our goal here is to make recurring payments invisible and seamless to users. One of the ways we work to make sure there is transparency is to use several payment rails represented here by the horizontal line. The first is the credit rail, the second is the debit rail, and finally, the third is the Pix rail. In nine to ten days, the Central Bank of Brazil launched a new modality, the automated Pix, and we are prepared for this launch, and this will be a fourth rail that can be combined with the others, as you will see here in my example. In this example, we have a typical customer. They want to include one of their bills, like monthly school tuition, as a recurring payment. They enable this option on the checkout, and then in February, the next payment cycle, everything runs smoothly.
You know, the payment's made in a transparent way for users. In February, the consumer has lost the credit card. I don't know, for any reason, he has to get a new credit card. This is very common, and it's a nightmare for any company that works with recurring payments because the user usually leaves your base. If the problem is not solved, the LTV will be lower. Actually, two weeks ago, I lost a credit card, so I had to block it, and now I have dozens of services coming after me to try and update my credit card information. Anyway, we do have a partnership here with the credit card brands that provide more robustness to the solution.
We have the tokenization solution that will give us the information that the credit card has been replaced, and the token that is stored in our wallet is replaced, and the user does not have to do anything. This is a very transparent movement. In the March payment cycle, the transaction is performed in a seamless way, although the user replaced their credit card. In April, when we try to make the payment go through, the transaction fails. In this case, it is because the credit card limit has expired or it is over. In this case, we do an operation a few days earlier. In this case, the customer could not pay, and the orchestrator decided to keep on trying. There are many mechanics for the retry. The customer was out of limit, but then the credit card limit was renewed.
In a transparent way, the payment happened without any intervention of the end consumer. Now, in May, once again, the customer had no credit card limit. The decision of the orchestrator here was to change payment rails from credit to debit. Of course, this we acquired prior consent. The user had to opt into this. The customer had no card limit. This would be his preferred payment method, but he allows this fallback to another payment method, and the transaction was successful. A story that would have multiple failures here actually runs smoothly. Finally, in June, this guy's out of luck. He had no credit card limit again, so his credit card was not accepted. The orchestrator tried all the other modalities, but still was not able to make the payment go through.
That is when the orchestrator decided that in order to continue, they would have to get in touch with the user using the different communication technologies, either email, SMS, but mostly WhatsApp. Lucas will give you more details about this later. We offer alternatives here. You can either replace your card or pay by PIX, and the goal is to make sure the transaction will go through. If you register a new card here, that is the card that will be used for future transactions. What we can see is that when we add up all of these different mechanisms, we can provide greater comfort to end consumers, and this has a relevant impact on the conversion rate of recurring payments. When we look at the basic that does not use all of these mechanisms, the conversion rate is around 70%, seven zero.
When you use all of these mechanics, you can increase this rate by 20 percentage points in absolute numbers, which is quite relevant. Now, the last topic here I want to address is the installment payment modality. That is what we call flexible installments or settle now, pay later. We focus here on bill payment. We are talking about essential services, recurring bills, like those bills that end consumers will try to avoid as much as they can, being in delinquency, being overdue because they could have their power cut out, for example. The traditional installment possibility that we see in retail, in which the merchant will cover the transaction cost, if we were applying here to these cases, since these are recurring bills, it would create a distortion, a negative incentive of postponing payment at all times, and that would create a great burden for the service provider.
On the other hand, for consumers, it makes perfect sense. They need some breather so that if they make the payment installments up to 24 installments, making the most of the credit line that has been pre-approved for them, this is low friction, they can even combine multiple credit cards, so multiple credit lines that are added up when you make a payment. They are not overdue. From the point of view of companies, since this modality passes through a small fee to end consumers, we can make the payment to the service provider earlier. We are talking about large companies with a huge cash flow. Interestingly, power companies have on D plus one, so the day after the bills are due, 30%-40% of the bills have not been paid yet, and this impacts the.
This is a benefit for end consumers, and it reduces delinquency as well as collection costs. For this modality, we decided to start with that in the power market, which is the most essential service in people's lives, so electricity. The adherence was great. That is how we got into the utilities market. More recently, we offered the same solution to other industries, such as mobile internet, broadband, and payment of monthly school tuition fees. Now I'd like to invite Lucas Zardo to talk about Grace, our conversational payment platform.
Good morning, everyone. Before I get started, just a curiosity, our last Bemobi day was two years and a half ago on the exact day that Pedro and I started dating, and I became a Bemober. Then we got married, and now we are in a happy marriage, right, Pedro?
Anyway, joking aside, we are going through a revolution in the way we interact amongst ourselves and with the brands and companies that are part of our daily lives. Studies say that 85% of our interactions are solved via messages. For many of us, I would say the rate is even higher. On certain days, I see myself spending the whole day talking on WhatsApp, Slack, Teams. A lot of what we do on our day-to-day lives is based on conversations. We are going from a world where the relationship between people and companies is also on messaging apps. The interactions are more and more conversational today. We do things by talking to companies. When we talk about conversation, in the Brazilian market and in many of the markets where we operate abroad as well, you talk via WhatsApp.
How many people do you know that are not on WhatsApp every day? Very few, right? Maybe you cannot even recall anyone. WhatsApp is ubiquitous. It is everywhere. It is in our personal and in our professional relationships, as well as in our relationship that we have as a consumer with a brand or a company that is a service provider. This is a communication channel that has come to stay. This is the dominant channel here in Brazil and abroad as well. When we look at WhatsApp as a tool or as a solution, we see that there has been a major evolution of this product as a platform to enable companies to create relationships with their customers. We work with Meta. Thank you for being here, by the way, in building a product that Meta calls WhatsApp Pay.
This is a payment product embedded in our day-to-day conversations on WhatsApp. WhatsApp is becoming a main actor in the set of tools or solutions of Meta itself. Mark Zuckerberg, in the last earnings call of Meta, mentioned the importance of WhatsApp as part of Meta's solutions package in the B2C market. We see companies either being founded with WhatsApp as the main channel or adapting to this channel in order to build tools that are used on their day-to-day, like Maggi and Mailbank. This is a digital bank, and their main communication channel with their current account holders is WhatsApp. Omi, they focus not only on B2C, but also B2B customers, and they believe that all of them can use WhatsApp as the main channel. Management ERP embedded on WhatsApp.
Now, on the other hand, we also see a major transformation, as Pedro said earlier. AI is no longer just a hype. Maybe a bit, but this is already a real solution being converted into tangible products that we can see from the launch of the main LLM tools that we saw in recent years, all the way to 2025, in which we reached the main inflection point in which an LLM will talk to you, and it will feel like a human talking to you. It is now affordable to do so. It is no longer expensive to have a machine talk to you, and you think that you are interacting with a human being on the other side of this conversation. The convergence point has been reached.
We can now create products and services based on AI that are affordable and transformational when it comes to quality of conversations and quality of interaction with your customers. When we put all of these three spheres together, these three worlds, WhatsApp and digital payments, which is our DNA, our core business, a few weeks ago, we lived a remarkable moment in our journey of how we look at the platforms and technology. I said that this is a Shakespearean moment. There is a tide in the affairs of man that will lead on to fortune. Yes, this is one of the waves we're surfing, one of the major waves. This is the moment in which we will put together platforms, technology, our experience, what we do best to develop a product. This product is called Grace.
This is our new Bemober in the team of products and solutions that we deliver to customers. Grace was born 100 days ago. It's 100 days old. We put together our best team of engineers to create the best market solution. The team is fantastic, but without AI, this would not have been done in 100 days. We are making the most of those two waves that Pedro mentioned earlier. The first wave is how we use AI on a daily basis to become more productive in our routine and extract more value from our routine tasks. Here we are also applying AI. AI becomes a product, a tool, a solution, and will address a natural problem right there in the field with our customers. I will show you a brief video about what Grace is already doing and what a conversation will look like on WhatsApp.
Since to create videos of this type, AI is not that good, it was more work for our team to create the video than most of the solutions that are included here. Now, why is Grace special? Why is it important in our portfolio of solutions? First, Grace is vertical. Pedro was talking about this earlier. We see this vertical structure as two different fronts. It is vertical because you are putting together different parts and pieces of software to deliver a way more appropriate solution to tackle the problems that our clients are trying to tackle and that the clients of our clients are trying to tackle at their endpoint. It is also vertical because we are specializing in the industries we already work with. This is not a product to cater to every single business out there.
This is a product created for what makes sense for us, for telecommunications, utilities, education. We know these industries in depth. We have delved into them. We understand them well. We know their pain points, and we know how to tackle their pain points with real solutions. Secondly, Grace was born to boost our DNA, which is payment. It is created as a tool that enables payments to go even further. As Pedro was saying, you can go north, and that is the channels where the clients of our clients are interacting and using payment solutions. Grace behaves as one of these channels, maybe one of the most relevant ones for the next few years because we have this trend of using conversational tools. This is how people interact with brands and companies they buy from.
Finally, being a latecomer is not always an advantage, but we do believe it's an advantage here. Using AI for this product is something natural for us. Our team uses it on a daily basis to build tools. We're always thinking about how to use this tool as a product solution in an embedded way. We have trends that are transformed every single day. We have new LLM models every single week. Sometimes within a given week, we have two different launches from big international players like OpenAI, Anthropic, Google, Meta. When you use them, when you really understand how these models allow for the creation of other things, then we're able to apply and break down these actions. This is real.
Of course, we have a design layer here, but this is a real example of what we're doing right now with this product that we put together 100 days ago. We're processing millions of messages every single day. Somebody may be having a conversation right now with an AI agent. Many of these clients actually believe that they are talking to a human being. In this hypothetical case, this client is about to watch a match. However, they ran out of data. They forgot to pay their bill. They wanted to stream the match, but they were unable to have access to it. They start a conversation on WhatsApp with the company that provides them this service. It is a conversation, just a regular open text situation, as if they were chatting with another person. Now, this agent is going to understand where they're coming from.
They will understand what's happening. This is a pain for this client. It's not a general situation. We need to think about impact. We need to think about the pain for this client and how to tackle it with a real solution. Agents will have to identify this client if it's the first time they have access to this channel, and they need to find a solution that is going to solve their problem. Again, you see this is a conversational message. They are not just providing us with their individual number. They're saying, "Please, it's urgent," because they want to see players playing. Now, our agent is able not only to understand the context of this problem and lead to a solution, but we see the building blocks of our solution. Here, you're connected at the south border. You're connected to billing, CRM, ERP, right with our clients.
You have access to the information of the outstanding bills. Based on our payment intelligence tool, we also know that they have a card with us, a Mastercard ending in 1234. We know that given the situation and given the past history of this client, they would probably pay this bill in installments. We have the full picture. We are ready to solve this problem with two or three messages. We have a quick solution so that this client can solve their problem. Everyone is happy. Of course, this is a Brazilian client, so they are having a conversation via text, but Brazilians love audio files. Here they say that yes, they would pay with their credit card. Four installments is fine.
AI is going to now switch to the audio mode because if clients are talking to us by voice, then we have to adapt. We are going to also answer by audio. The AI knows that they want to pay in four installments. They are going to prepare the payment structure, and they are going to give the option for this client to pay their bill. It is another building block of our solution. This is a native component that we built with Meta. This is done with WhatsApp Pay. In WhatsApp Pay, we have an information card with the total for this bill, how they are going to be paying, the payment method for installments, and they just need to click Pay Now. They click Pay Now. Payment is successful, and we charged four installments of BRL 32.5.
Now we have a happy client who is ready to watch a soccer match. As we receive this payment, we also go to the south border. We go to the billing structure of this telecommunications company that we work with, and we let them have access to their internet data package again. Now they'll be able to stream the game. This is just a sneak peek of what Grace is able to do. If you're in São Paulo, you're going to see this happening when you use basic services that you pay for at your home. You're going to see this in the next few weeks for one of your basic utility services. This is just a glimpse. There's still a lot that we are building in real time. We see new solutions every single day. AI is making strides every day.
We are co-building tools with Meta all the time. This is a product that could really boost not only this channel, but also our whole ecosystem. We'll go from the north border in direct relationship with clients to the south border in direct relationship with the systems used by our clients. These are some of our products by myself and Godin. Now, Pedro was talking about trends, AI, and payments. We were showing you what we are making available to you in a very concrete way. Now, João, our CRO, is going to bring it home with the market opportunities that we're going to look into more heavily in the next few years. We're going to see how we'll be able to extract lots of value from these products and from these market opportunities as business opportunities. Thank you.
Hi, can you hear me? Good morning.
I'm so happy to be here again. As Lucas was saying, I do have something fun here because I'm going to show you how this is going to turn into revenue. I'm also going to show how this is going to lead to our growth at Bemobi, which is accelerated right now and which will be even more accelerated. Let me borrow from a known framework from McKinsey, the Horizons framework. I'm going to split our types of growth into three big horizons. Of course, this has been adapted. We have time horizons here, and we have now, new, next. Everything here is actually starting at the same time. It's not a sequence, but they do have a different timeline. H1 is now. This is the industries where we are already active. This is the country where we're very strong with payments.
I am focusing a lot on growth here. I am talking about the 80-90% that Pedro was talking about. We are going to be growing that in payment solutions. Of course, we are going to be growing with other solutions too, but today in our breakdown, we are going to be focusing on the most accelerated growth that we expect to have. In H1, we have what we do right now in the industries where we are active right now, basically telecommunications, utilities, and education in Brazil. We are going to go into details, and we are going to get to figures of what we believe is the potential of what we are doing and why. Our second horizon is our new activity, industries, and new locations. We have proven our theory for telecommunications, utilities, and education, but we have other similar industries which could have big potential. We are going to start with them.
Also, we'll be very strong with our solutions in Brazil, and we may find other locations for these proven solutions. We have our third horizon for revenue growth. This is cross-selling between SaaS solutions and payment solutions and vice versa. I'm going to go into details about all three horizons. We're going to break down the first one the most, but you're going to clearly see what we see for this business for the next three to five years vis-à-vis our potential for growth. Think about 2021. This is a slide that Pedro was using. When it comes to this horizon and to opening up new industries, we're not as traditional as service businesses or SaaS businesses or tech businesses. Usually, companies start at the bottom with smaller clients, and then they grow in the industry. We are a high-touch business.
We work with the biggest benchmarks in an industry. It usually takes us longer to make the sale. It costs us more, but it also gives us lots of learning. It turns us into a benchmark, and it makes us reach these industries in a more structured, broad way. This is what we did with telecommunications. We had TIM, Claro, Vivo, and now we have ISPs in the long tail. Also, with utilities, we went straight to the big players. This is also happening with education. We're working with big groups like Salta and Inspira, which are big for middle education. This is what we're doing for these new horizons. Here you have a spoiler of a brand that we haven't officially announced for utilities. We're actually mentioning it for the first time today. You're going to get more details soon. This is our playbook.
It's like a domino effect. You get the big players, and then you sweep the industry with a proven solution. I know there's a lot of information here, but this is important for us to explain how we calculate and how we see the potential for growth. We usually pick a big, important segment. This is our TAM, our total addressable market. For instance, utilities or electricity. As you go down one level, you have the total addressable market for your client. It's a share of this market. For electricity, we have around 70%. So 70% of the TAM is available to us. Then we have a third layer, which is really important. This is what's available to be serviced. Even if I am in a huge market, I won't be necessarily able to service all of these clients for many reasons.
Maybe because of the competition, maybe because I'm not the only one in this scope, maybe because of the speed of adoption. We estimate our SAM, which is the serviceable addressable market or the serviceable available market, as the B2B. We are actually reaching B2C. We're reaching the end customer, but oftentimes they have corporate clients that won't be serviceable by me. Finally, we have our penetration. This is my current penetration, how much I've captured from this market. When we do the math between the new clients that I could acquire and the penetration that I could increase, we have a growth potential. In H1, we're going to talk about telco, utilities, and education. We're going to see where we're at, what we've reached, the size of the market, and where we think we could be. Let's start with telco.
This is the first industry where we started working with payment, and historically speaking, it is our biggest presence. We have mobile with prepaid and postpaid plans, and we have fixed broadband. When we look at these segments, starting with prepaid plans, we have a yearly segment of BRL 20 billion in TPV. We're having technical difficulties. We apologize for having power issues. Please give us a couple of minutes. We're having power issues, and our generator is not working. We just need to make sure everything is powered by the generator. Let's take a quick two-minute bio break. We'll be back soon. I know that you like the catering. Are we all set? Okay, Nicholas.
I was talking about horizon number one, which is the growth that we could have in our industries focused on Brazil, which is the country where we have more activity for payment and SaaS right now. Let's start with prepaid plans. We have BRL 20 billion in TPV, and we're always measuring the potential in TPV. Of course, then we turn it into revenue as our clients are in this TPV depending on the services we're providing them with. TPV is our reference here. When we talk about prepaid, it's BRL 20 billion focused on three operators: TIM, Claro, Vivo, where we have 100% of operations. We have 100% for the segment for Bemobi. There's no carrier here that we're not working with.
Now, with SAM, I can't say that I'm going to work with 100% of top-ups in Brazil because they have brick-and-mortar stores, they have banks, they have wallets. We're able to capture some of it. From the accounts that we have, with the experience that we have, we believe that we could reach 25% of the SAM, of the SAM. We have 46% of the 25%. We have BRL 2.4 billion out of an industry of BRL 20 billion. We have no other clients to conquer here. We have the three biggest players. If we're able to achieve our SAM, that's going to be a two-time growth. Our potential for top-ups is to double its size for Bemobi within three to five years. This is when I capture the available market. Now, for postpaid plans, we have a similar market.
We have a BRL 84 billion, and we have 98% of this market because some small carriers have postpaid plans that are not controlled by us, but the biggest ones are with us. The SAM is different because it's about adoption, digital payment methods. It's still very traditional. They pay bank slips, they pay traditionally. We are capturing clients here, but we have more space. Our SAM for this market is 15%. Right now, I have 32% of that with BRL 3.9 billion of the TPV. Our potential for growth is around threefold. Something different happens with the broadband. This is a very scattered market when it comes to its players. We have three big blocks. We have the biggest operators operating in broadband, or the biggest carriers. We have big ISPs, and then we have over 15,000 smaller ISPs.
We try to work at a higher level, but here we have a broader range of clients. Right now, out of BRL 76 billion, we have 16% when it comes to our penetration. We believe that our SAM is 20%. This is the available market that would be serviceable right now, and right now we are catering to 8% of that. We have a BRL 0.2 billion rail here, and our potential is to multiply this by 30 times as we acquire new clients and as we do better. In utilities, we have something different here. We have a breakdown of clients. Of course, I'm not going to name names, but this is an actual breakdown because we want to show you how different the level of maturity is for our services within these utilities.
Of course, this has to do with the time and the number of services that we've been offering. With electricity, we have BRL 212 billion, and we are present in 68% of it. For the SAM, the available market, it is much, much smaller. Let me tell you why. We still have monopolies here. This industry is not as focused on novelty or digitalization because basically there's no competition. We end up focusing on clients that are delinquent, that are far ahead in the collection roller. The SAM is going to expand as we have a more open, more competitive market, but right now our potential for the SAM is 8%, and we have a 16% penetration. What varies here is the level of penetration that we have for these accounts. Let me show you two examples. We have a high potential for growth here.
Company C has a TPV of BRL 30 billion. We are addressing 45% of the available market. This was one of the first companies we worked with. We developed it well. They have all of our services. Everything that Lucas and the team were showing has already been deployed. Now, for Company A, which is similar in size with BRL 35 billion, I only have 0.4%. If I actually bring all of these utility companies to a similar level of the first company we worked with in this industry, we have a huge potential for growth here in our revenue. When we look at the overall potential of increasing penetration and also addressing more clients because we still have room for growth in the 68%, we are talking about an eight-fold increase for the BRL 1.8 billion for the utility industry.
Now, when we talk about education, we have two breakdowns here. We have private basic education, which is K-12. This is BRL 120 billion right now. This is a very scattered market. Yes, we have the biggest group of K-12, the second biggest group of K-12, the fifth biggest group of K-12 in Brazil, and another 300 schools with smaller groups, but we are still only at 7%. We have a big long tail here. We have lots to explore. Here we understand that our serviceable available market is 35%. Our current TVP is BRL 0.8 billion, so we have a potential of seven times. With higher education, we can look at the current penetration, and we have our first client, Yduqs. It represents 9% of this industry. Look how different the structure is here.
We have 7% in K-12 with hundreds of clients, but for upper education or higher education, we already have 9% with one single client. It is a BRL 58 billion industry, and our SAM is 35%. We do not have specific numbers for the current TVP because it all depends on our penetration, but you can imagine the potential of this market for us because we are just getting started. Let's see some final figures for Horizon One. For telco, we have BRL 180 billion, and we have BRL 6.5 billion, which is 3.6%. We believe that in upcoming years, we have the potential to reach BRL 24 billion, meaning 13%. For utilities, we have BRL 212 billion. Right now, we have BRL 1.8 billion. Our potential is BRL 14 billion for upcoming years. For education, we are still small. We have BRL 0.7 billion and 0.5%. We have the potential to multiply this by 15 times.
This is our Horizon One. This is something we can measure more clearly and accurately based on what we believe is out there for us. Let me have Horizon Two. Here we have two different lines. First, we can open up new industries where we're already active, and we can go to other countries. Let me talk about the new industries first. Here's the spoiler that we saw in a previous slide, and this is now official. We're starting to work with Sabesp. This is our first client in water management. By itself, it represents 26% of water distribution. It's a BRL 59 billion industry. We're just getting started. Lucas was saying that clients in São Paulo will see Grace in their basic utility services, and this is one of them. We're launching it. We're already operational with Sabesp. We don't exactly know what the SAM is here.
It's probably close to what we have for power, for electricity, because of market conditions. There are specificities, so we need a bit more time to clearly understand the potential here. Our second line here, and we still can't disclose any clients, is private health. This is a huge segment in TPV. It's important to make it clear. We're going to actually service a subset in this industry. We have lots of clients we won't be able to work with, but we have individual healthcare plans, and this is why we estimate a 10% SAM. We're talking about around BRL 30 billion. This is probably the addressable market for us in this industry. We're also taking into account life insurance, auto insurance, and condo bills. This could be very important for us with high values.
As I was saying at the beginning, we cherry-pick what we want to do, not only when it comes to solutions, but also size. We started with the biggest, around BRL 200 billion each, and now we're migrating to other sectors where we have BRL 50-60 billion. Insurance is really big, but we're only able to work with a subset of it. There's another lane of growth for the Horizon Number Two, which is countries. We could go to new locations. We chose three countries where we're going to be using payment services associated with SaaS. We're focusing on LATAM. First, we have Chile. We already have ENO in Chile. Chile is a well-developed country when it comes to payments. For telco, it is basically a postpaid market. They do not have lots of prepaid services. Electricity is distributed privately.
We decided to start with Chile with electricity because it is a big market, as I was saying. We are now looking at other things that could be good for payments. Our second country of focus is Colombia. It is different from Chile. It is well-developed when it comes to digital payments with lots of wallets and local types of payments, but it is a prepaid country for telco. Electricity is mixed. Half of it is public-owned, half of it is privately owned. We are working with prepaid plans. We are taking small steps, but we are starting our activity here in Colombia. We are going to look for opportunities with postpaid plans should they be interesting for us. Finally, we have Mexico. Mexico is very different from other countries. It is a cash-based country. We have credit card and debit.
Of course, there's growth here, and it's basically prepaid for the telco industry. 85% of it is prepaid. Electricity is publicly owned. We are going to replicate the solutions that we have for top-ups in Brazil, the BRL 20 billion market that I showed before. This market could even be bigger than Brazil because it is basically prepaid. When we look at this block of countries, what we see is a potential that matches Brazil. If we add up Chile, Colombia, and Mexico, we can consider yet another Brazil to operate in. That is why we are stepping into these geographies. Now, looking at Horizon Three, the cross-sell horizon, we talked about our SaaS solution. Pedro talked about Wave and Grace. These are solutions that we either developed or that we acquired and brought into Bemobi. We have our payment expertise, and that all creates cross-selling opportunities.
Agenda Edu was already penetrated when it comes to SaaS. It's already in many schools and the education market, and it's already a channel for us to go into payments there. It was a payment cross-sell within SaaS. The opposite also happens. We have a good footprint in telco and utilities in terms of payments, and we have opportunities of cross-selling Wave solutions, as well as Grace that you saw in details earlier, our conversational payment platform. A great example of how that works is Sabesp. Sabesp is our water utility. They're with us in payments with Grace and Wave. We are working on channels of digital engagement, conversational payments, and the whole payment structure for them. That's our third growth horizon where we create new revenue lines with the customers we already have with SaaS solutions. That's all.
I hope I gave you a clear view of how we're growing. My goal was to give you details of Horizon One, which is more tangible so that you can understand where we want to get. Of course, I gave you a high-level view, but I'll give the floor over to André to walk you through our financial results. Thank you.
Good morning, everyone. It's great to be here with you once again for our second investor day. As João said, my goal in the coming slides is to tell you about the evolution of our main financial metrics since our IPO back in February 2021. Before I dive into these metrics, I would like to share a piece of information with you.
This matrix may seem complex at first with these waves going from one side to the other, but this is a 3D building block with interesting information about how Bemobi's revenue is made up, who was sold to, where the revenue is generated. If we look at the information that is released to the market, we know that 60% of Bemobi's revenue comes from Brazil. The other 40% came from abroad, but there is a balance between the revenue generated in Latin America and the rest of the world, as you can see. When we break down by service line, the two main growth engines of the company are digital payment and SaaS, respectively. Digital payments accounting for about 40% of the revenue, SaaS 20%, microfinance 10%, and digital subscription accounting for 30% of the revenue.
Like João and Pedro said, 70% of the payment revenue of Bemobi comes from the telco segment, another 20% comes from utilities, and 10% from education and new businesses. We can see that the revenue comes mainly from Brazil, predominantly. When we look at the first quarter 2025 earnings results call, we mentioned that we had internationalized this solution, taking this to ENO in Chile. The results have proven to be quite promising. We have great expectations about rolling this out not only to other utilities, but also other telco companies. When we look at SaaS, we can see that there is a certain balance between the revenue generated in Brazil and in Latin America. The main partner is the telco companies in these two geographies.
This is a more spread market in the different business lines, not only utility, but also education is well represented here. When it comes to finances, as we always said, this is a service line with two major components: advance payments and microcredits, voice and data, to serve not only the Brazilian market, but also countries in Latin America and the rest of the world. The data monetization service line serves the financial industry, mainly in Latin America. We're talking about Mexico, and then we also internationalized the solution to Colombia. Finally, the digital subscription line. If you remember well, this revenue started out in Brazil. Brazil was the main market for many years.
Due to the maturity of this offer, Brazil has been losing relevance in the whole, and this has become a predominantly international type of revenue focus there in Asia, but also growing in other countries of Latin America. After this introduction of Bemobi's revenue boot-up, I want to focus now on the main challenges that I, as a financial manager, and had at Bemobi tried to address. I basically have four plates that I try and balance out, and our mission is to support and contribute to the company's growth agenda, but doing that in a profitable way, generating cash and shareholder return, of course. When we look at the financial scorecard in a time horizon from our IPO to the end of 2023, and adopting a more critical assessment of our performance, I would give us an average score for growth.
I'll give you further details of why in the coming slides. Bemobi has always grown in its history. It faced some hardship in the end of 2022 and throughout the year of 2023, which generated questions from market agents about the real ability of Bemobi growing. However, not only the profitability and cash generation variables did well in spite of all this adverse scenario, Bemobi was able to deliver increased profitability and increased conversion of. That's why in our own assessment, I would say we got a good score here when it comes to these two variables. However, when we look at shareholder return within this time frame, I would say that we did not live up to the expectations. When we got listed back in February 2021, the macro scenario was favorable, interest rates at 2%. Many companies went public.
Curiously, up until recently, we did exceed the price of our IPO if we adjust for earnings. In a way, we could be considered a good performer as compared to other companies that got listed at the same time. We definitely were below our expectations when it came to shareholder return. The good news is that things are improving, and I'll give you now more details about why that is happening. When we look at revenue and EBITDA growth, since our IPO back in February 2021, we had been delivering growth. In 2023, as I said, we faced major adversities because of the migration of Oi customers, that's something that started the previous year, and also the Russia-Ukraine war to very important geographies, and that hit Bemobi's capacity to deliver growth.
There was a certain skepticism in the market about how we would be able to deliver growth. After that, we started to communicate this, and this becomes even more visible when we look at our last quarterly results that were released. We have seven quarterly results in a row with growth, either from the perspective of revenue or EBITDA. We have been accelerating our growth base because of our operational leverage here in EBITDA. In the last five quarters, we also see that the growth has been accelerating in a year-over-year comparison. When I look at net income, among the financial metrics, I'd say this is the best-performing metrics. We've been growing 36% a year since our IPO, and we see a similar pace of growth in cash generation.
The growth was even faster when we compare the first quarter of 2024 to the first quarter of 2023 and the first quarter of 2025 to the first quarter of 2024. We accelerated growth from 16% to 28%, and we also improved our EBITDA to cash conversion indicators. Except for some individual POS acquisitions to support this growth that my colleagues talked about, we believe that CapEx will grow at a lower pace than EBITDA. That is why we see this acceleration into cash conversion. This becomes quite visible when we look at our cash position. Since our IPO, we reached almost BRL 600 million at the end of 2024, and this is combined with interesting perspectives for 2025, which made our managers comfortable to approve a new dividend policy.
Now, looking at the shareholder return metrics, I just want to remind you that Bemobi has already returned BRL 320 million to its shareholders. Of them, BRL 200 million were paid out in earnings. The first tranche of BRL 58 million was paid a bit over a month ago, and there are still BRL 142 million to be declared and paid out in the coming quarters by the end of 2025. Our payout ratio was lifted from 25%, which was the minimum, to 100% at the end of last year, and we believe that this will continue throughout 2025. At today's prices, we're talking about a dividend yield of the outstanding share that still needs to go into our guidance of 9%.
About buyback, we bought back 8 million in shares of our company, about 9% of the total shares and BRL 121 million, and our swap operations are still ongoing, a bit over 2 million shares, accounting for 3% of the total shares and BRL 44 million at the current price. We are talking about BRL 60 million that can be returned to our shareholders potentially. My main takeaway message here is that at the end of this process, and because of these two levers, we are talking about half a billion BRL. Considering the current market cap of the company, that is about a third of our market cap. Of this amount, about 60% was done from the end of 2024 up until today. There is still a lot of value to be captured here.
Now, looking at the capital market, we see that since we released the 2024 results and published the new dividend policy, the market reacted positively to the news, and we increased the volume of Bemobi shares that are traded, about 83% after the release. Of course, this was leveraged by the appreciation of our shares, an ADTV growth of 123%, and we grew four to five times more than this indicator for transactions and ADTV. Now, when we look at Bemobi 3 performance on B3 year to date to the end of May 2025, we see that Bemobi shares appreciated about 50%, outperforming Bovespa and Smallcap in 20 percentage points.
You might say, "Now it's too expensive." When we look at the end of 2025, this forward-looking view, these are buy-side metrics, the company is still relatively cheap, especially when we look at our peers, not only in the SaaS industry, but also payment specialists. In practice, the market has valued our recent operational performance. This represents a repricing opportunity of our shares. If we look at the most recent dimension and applying this financial scorecard analogy here, I would say that we've been delivering our historical growth once again, and we have promising expectations for 2025 and beyond. I would say that we're doing well when it comes to growth now. When it comes to profitability and cash generation, we've been able to sustain the profitability levels at high levels, and we can still improve this.
When it comes to shareholder return, I would say that we have improved a bit, but this is still below what we expect to deliver. We believe that we can optimize our capital structure and other variables. As I said in the last slide, I think that we can still value Bemobi's shares here a bit more. Having said that, I would like to thank you once again for joining us, and now I'd like to turn the floor over to Peter for his final remarks. Thank you.
Hi everyone. We are out of time. We are already running late, so I'll be very brief. This has been a long presentation, and we wanted to have this different format going into things that we usually do not go into to give you more visibility. Our company has a great capacity to observe the market and transform itself.
We went from a game payment company to a multi-sector payment company, and we implemented a strategy in the last years that gained momentum. We have some conservative customers that made the decision of continuing with us, and that was well thought of, and this has been giving us a more optimistic perspective that João included here in his growth prospects. AI, this is not a hype. We're going to be talking more and more about that. That's something that can drastically improve productivity. The landscape of the payment market, I mean, for small companies, I'd say this is more of an opportunity than a threat. We believe that we are well positioned to gain more than lose here because we know that some value will be destroyed here, but we are well positioned to make the most of these tailwinds, so to speak.
Something we did not say, but we would like to mention, is that M&A can be hard to generate value, but we have a good DNA when it comes to M&As. This is not a mechanism to bring in new revenues, but actually to bring in new capacities and to go into new segments. These are assets that in our hands can be multiplied and expanded. Part of our capital base, I mean, we want to give you better returns. We want to optimize our capital structure without impacting the nature of the M&As that we do. We intend to continue very active, and we want to be able to share news with you in the near future. About this scorecard, André gave us a good assessment, although it was a bit critical.
By far, I mean, in our technological deals, if we compare to our peers that went public at the time, we were the best-performing companies. That is not good because if I, as an investor, had put my money in CDI, I would be doing better, right? The other day we were celebrating, "Oh, we went back to the same share value." Yeah, okay, but if you had put your money into CDI, you had made more. We have to improve this. That is a goal we have. Even with the new prospect with a CDI of 14-15%, we would still need another year to exceed CDI returns. We hope to get better at these four dimensions that we showed you in our scorecard. Since we exceeded our time, I do not think we are going to have enough time for Q&A.
I mean, we do have some time for Q&A, right?
If you're here in person, please raise your hand, and we're going to take the microphone to you. Please say your name and your institution, and we'll answer your question. If you're online, please click on "Raise Your Hand," and we'll enable your mic. Maria Clara and then Luis from XP, is that right? You have the mic, right, Luis? Go ahead.
Hi, can you hear me? Congratulations on your presentation. I have two questions here on my side. The first is about the capital structure. André said that they are studying a transaction opportunity. Can you give us a bit more color into that? About the broadband market that is quite fragmented, can you tell us about your go-to-market strategy in this segment? Have you seen synergies and challenges?
What are the solutions that you have in mind for that?
About the capital structure in practice, that is actually quite simple. Since we were in the middle of a transformation, we did not know for sure what the performance of the company would be. In 2023, we thought that we had two vectors with a beginning, a middle, and an end pulling us down. An anchor client that disappeared in two countries that accounted for 7% of the company together disappeared. That was a new business that was doing really well, but the scale was small. Since you do not know the speed of these two movements, it gives you some butterflies in your stomach because you do not know how much adjustment you need.
M&A had been an important instrument up until then, but we were a bit more conservative to retain more cash because since we did not know how much would come in and the type of M&A we would do, we decided to be a bit more conservative. One year went by, and we had more clarity on the types of M&A that we wanted to do, different sizes of M&A, but we like not to do earn-out or call-repooch, something that does not require a major upfront payment so you do not put pressure on the short-term cash outflow. We were generating cash, which was good. If you add these things up, we realized that we could maintain our strategy and be more aggressive in payout. That is why André put 100 plus there because we can do distribution going beyond 100 now because of that.
We do not want this to impact our growth opportunities. We want to increase the payout and have a lower cash level, and this will improve ROE and other metrics as a result. Buyback is still an opportunity, but since it goes against liquidity, we are now going to focus on distributing earnings more than shares buyback. That was your first question, right? The second question, as you noticed well, the broadband segment has different players. Up until recently, we were focused on the top two to three carriers, and it was not by chance that when we decided to acquire Lucas's company—Lucas is back there, right? When we acquired his company, we were thinking about cross-sell because they had a SaaS solution, and they did something very similar to what we did with major telcos, but without doing that payment intermediation.
He created digital channels for small and medium ISPs with a service channel. This WhatsApp channel idea came from that, and they had a part to integrate with all systems, and they charged a software fee for that intermediation with hundreds and hundreds of customers. He found us and said, "Well, you do payments. I do SaaS. Maybe we can have a partnership." We got excited. It was more than a partnership, and we decided to integrate the solution. In that case, the go-to-market was facilitated because we had hundreds of ISPs for which we do not offer payments. We already offer SaaS to them. That small ISP growth, I mean, it was literally zero 12 months ago. The go-to-market is almost reverted.
It's easier to sell SaaS because they have a better selling engine for small and medium businesses, and then you can just offer payments. You ask, "Why did we go to Agenda Edu?" ISP and schools are fragmented segments. SaaS is much easier for you to do the low-touch sales remotely, and then you just do the payment upsell. Depending on the segment, if it's more fragmented, you start with SaaS and then payment. For more high-touch segments, we start with a more consultant approach, and the goal is the opposite. M&As, sometimes it's a way for you to get a very spread sector, fragmented sector, and you start with a very good SaaS line, which is synergistic with payment, and this can become your go-to-market if it's a market that is not your DNA with a high-touch sales and 10-15 customers.
So that's what we did to address the fragmented markets.
Can you hear me? Thank you for this opportunity, Pedro. This is Maria Clara from Itaú. And Pedro, can you comment on your three to five-year strategic plan? I believe that you have room for growth there. So can you tell us about the pace and the cadency? Oh, you have a major addressable pool. What is the priority of the sector? What is the growth pace that we can expect for the coming years? And also related to that, we know that payments has a higher margin. So can you help me explore the profitability trends in the coming years? Can you tell us about margin potentials in the future? Thank you.
Excellent. I'll be really careful. As you know, we don't offer guidance.
However, we did leave some hints on how we look at it in a realistic way. You know that on purpose, we dehydrated our TAM because it's so big, and we don't want to say it's going to be a thousand-time growth. We are being very realistic with the SAM. I'm going to answer your question indirectly. The SAM is actually addressable. Are we going to be able to execute on it? I don't know. It's real life. This industry, this market is not static. Sometimes you may have the competition doing the exact same. It's life, just like in any other industry. Our take-home message is that I don't think we should try and aim at 300 things to have a lane of growth. As João was saying, of course, we're going to do more because we want to accelerate growth.
We have tested offerings, and we could be able, we should be able to grow 20-40% with this structure. Of course, we're subject to different variables. Are we going to have these restrictions on payment methods? Are we going to have stress on the margin? Are we going to have more players that are not niched right now, and they're going to compete with us? I don't know. It's an efficient market. We're not living in a vacuum. What I would say is that right now, with the current conditions, we would be able to grow in the high double digits for this business. We have another part of the business that is going to grow less, but it's going to be between 15-30%. This is good for Bemobi. This is not a guidance.
If you look at what's going on with Bemobi right now, and if you do the math, it's obvious. Of course, subject to external market conditions. With the margin, I think we're going to have a pro and a con. I wouldn't be very bold in imagining better margins. What is good is the operational leverage. When we go into one, two, three for clients and I scale it up, if I grow, I can leverage a significant part of the structure that we already have. Of course, we're going to have more folks with customer success and customer service, but we're going to expand the EBITDA margin as a percentage. This is going to go up. You have two things going down, and in my opinion, this is going to offset the previous effect.
With these new changes with payment methods, we can't have favorites, and clients are going to have their favorites, but not us. We may have higher payments with some, but we're going to have a lower spread with fixed transfers, and that's okay. We may see scenarios where the TPV rockets up, and we may have a compression of the gross margin, but this is going to be partially offset by the EBITDA. With the gross margin, which is 70% plus, depending on market changes, this could reduce a bit. Maybe this could fall by half. I don't think this is a problem. We're going to choose this without thinking twice. Otherwise, we're going to be hostage to a capital structure that is not proper for the way this market is going to behave in the future.
With the operational leveraging, our EBITDA margin could grow more, but I think it would be foolish to grow it more because we have horizons two and three. Initially, in the first waves, we're not going to be seeing high profitability right off the bat. To have acceleration at the company, you have a trade-off. We could make it lean. We could cut all costs, but we're not going to do that. Net, net, I think I should see the margin improving marginally with the EBITDA. Otherwise, we would leave growth on the table. For the gross margin contribution, this could be a bit worse, even though payment is getting better because we're going to be using payment methods that are more massive, and it's a good trade-off. We're trying to grow.
This does not mean that we are going to be able to do it all the time. With enterprise clients, you have a slight curve. If you have three sub-bests, you have a step change. Sometimes we grow more quickly. Sometimes we grow less quickly. I think we are optimistic because in the last few quarters, we saw what is happening. We look at our pipeline, and we say, "According to regular market conditions, this is what we could expect." Nicholas, any other questions? Congratulations. Such a much, much better event compared to the previous one. I have a question about the work you are doing to keep this workforce, not only now, but in the future. Right now, there is lots of competition. People are fighting for talents.
In the future, these folks are going to be considering that they may lose their jobs because of the increase in productivity driven by AI. How do you tackle this right now, and how do you see yourselves dealing with this in the future? This is a great question. Of course, I have a bias. I'm an entrepreneur. Let me actually switch your question to something else. I think whatever professional, either at Bemobi or other companies who do not learn how to use AI, are going to be the first ones to be replaced. This is what we're trying to convey in-house. It's tough. It's tough love because it's adapt and enjoy it or leave. In a way, that's the message. It is a tough message, tough pill to swallow, but I think it was well received.
I think in the long term, this is going to actually attract talents. If you're curious, if you're creative, you want to use AI. If a business does it well, people are going to enjoy this advantage. You ask, "Is this going to increase or decrease the number?" I think for some roles, we're going to decrease the number of that certain role from our repetitive tasks, and we do not have many of those at Bemobi because we're very digitized. We're going to have fewer positions, let alone in the traditional market. However, there's going to be demand for more interesting work. We have so much ambition. If Bemobi had the ambition of being the same size forever, yes, maybe we could have 60% less folks in four years. We want to grow by 10 times. I am not worried about reducing our workforce.
I think our headcount is going to go up. Of course, we're going to try to use AI. You know, holding our headcount is almost a pressure tool to ensure that we're going to use AI for that. Yes, we're still going to grow. I don't think this is a dilemma. The fight over talent is what it's always been. What's good is that we're lucky in a way. Since we are at the leading edge, since we're trying to get newer things, this is more fun work. This kind of talent wants to be a part of it. This is helpful. I think it is easier for a Bemobi to bring somebody who is innovative to this kind of department than a client of ours because they are incredible, but this is not their core operation.
If we're able to attract the best talents, our candidates for a position are actually better than they were three or four years ago. That's good. Nicholas, I think we're running out of time. Hi, Pedro and Gabriel from Morgan Stanley. You did improve many things for the company according to the performance you disclosed. From a foreigner's perspective, you're seen as a small company. Is there anything that you're doing to actually draw more attention from these folks from abroad? This is a good point. If we want to be more acidic, we lost to the CDI and to the exchange rate. For foreign investors, if they came to Brazil with BMOBE in 2021 with the IPO, the salad was different. I don't even want to think about the foreign exchange rate. It wasn't good.
If you look at it, our foreign participation is small. It is under 10% of foreign investors. However, on the upside, it more than doubled in a year. This doubling is not our merit. I think this is a macro trend. You know this more than I do. If there is any kind of uncertainty in the U.S., capital adjusts and it reallocates to the rest of the world. As other companies, we were able to serve this trend. Now, looking ahead, it is as simple as gaining in scale and growth. There is no magic recipe. Of course, we go to New York, Nicholas and I, we talk to foreigners, we bring visibility to our business. While we are small and we are growing little, there is no recipe. Maybe we could simplify the equity store and the company. I think this would be a good step.
In our last meeting two years ago, we were talking about four reasonably different businesses. Today, we talked about one single topic for three hours. This may sound simple, but it simplifies things for foreigners because they look at a medium-sized asset in Brazil. If they are able to put it in a box, it makes it easier for them to do business with us. Of course, we did not change the company because of this, but it is an added benefit to what we are doing. Since we are focusing heavily on one single value proposition, this indirectly benefits every investor, especially foreign investors, because in the time that they allocate to this research, if we are simpler, they can say, "Well, they are comparable to Stripe, to Adyen, to Salesforce.com." I do hope they compare us to these. In practice, these are our peers in these markets.
Having a simpler strategy, focusing on an industry that has more comparables could also be key and also growing in scale. This could help, but only time will tell.
Pedro, we have one last question from our online attendees. Bernardo will speak now.
Bernardo, please go ahead.
Hi, good afternoon. Can you hear me?
Yes, we can.
Great. Congratulations, Pedro and team. We've had a two-year gap since the last investor day, and we can clearly see that you've made strides. You went deep into the topic of payment, and the AI topic was really surprising too. I'd like to talk about the evolution of Bemobi with payments in connection with the segment of microfinance. Some of your theory, which hasn't been validated yet for microfinance, is the company's potential as a digital wallet. Maybe you could make progress with microcredit too. You showed evolution in micropayments.
Isn't this connected to Bemobi's potential so that in the future, you're able to offer more thorough banking solutions? Does this make sense to you, or am I out of my depth?
Bernardo, I'm not going to sugarcoat it. I'm going to be straightforward. We usually joke around saying that we aimed for something and we got something else. Taixa had a small project working with scoring and telecom data. We had penetration in lots of carriers. So we were interested in this solution, and we had good execution, but it's a B2B, so we don't offer credit. At the end of the day, we help companies offering credit like Mercado Pago and Nubank to use alternative data for their scoring model. So this is a good business. Yes, we do share synergies with it, but they work directly with the telcos, with which we already work.
There is a sales synergy that is great. There is indirect synergy as well, which I do not think is significant. Think about Colombia and Mexico. For us to think that a market is actually good, it needs to become similar to the Brazilian market because this is where we developed our solution for a perfect match. Think about what João said about Mexico. They have under-penetration for credit cards, and they use lots of cash. If you have an offering working with alternative data for credit bureaus, and then we are going to feed this data into the biggest players for credit in our country, and Nubank is one of the biggest players, and they are a strong partner of ours there. Great. This market could look like Brazil, and this is great, but it is like the tail wagging the dog.
Bernardo, I wouldn't say that this business is going to become a wallet. We are not from a B2B2C DNA. We think this is different. We want to be focused and be good at specific things so that they can choose us, big players can choose us for big operations. This is an option. This is in our back pocket, but I wouldn't say that it's between our top five or ten priorities today. Let's see where we're headed with our business. Of course, this is going to help the other operations, but I do believe in the wallets that Felipe Godin was saying. This is similar to what PayPal did in the American industry. In Brazil, they didn't have the depth to do it. Stripe is also doing the same in the U.S. You're eliminating friction. You're literally talking to tens of millions of people.
You have many clients going in and out all the time. It's the B2B model, and it's good for the end client because it eliminates friction, but it's good for whoever hires you too. Why do you use Mercado Pago? Because your wallet has been set up. If we're able to replicate that to my companies, which do not enjoy that right now, great, but it's different from the B2C market, and we don't know how to tackle it well. This is the end of our Q&A. Folks, thank you so much. Of course, we shared way more than usual. Again, I would like to stress that this is not a guidance, but we are showing you a look under the hood. We are telling you what we see for this business, and I can tell you that we are excited.
The market has been responding well to us in spite of its complexity and dynamicity, but thank you so much for being here. It's been a pleasure. Enjoy your day.