SAO PAULO (Reuters) - Brazilian online financial startup Toro Investimentos will kick off operations on Wednesday after winning regulatory authorization earlier this year to enter the country’s increasingly competitive retail brokerage market.
In a sign the new firm expects to be aggressive on pricing, Gabriel Kallas, Toro’s founder, told Reuters that clients who lose money by following Toro’s recommendation will be exempted from fees on those transactions. If clients make profits, however, a fee equivalent to 10 percent of their capital gain will be charged.
Kallas compared Toro to U.S. free trading app Robinhood, which raised $363 million in a new round of funding led by Russian billionaire Yuri Milner in May.
Toro will compete with brokers such as XP Investimentos SA, in which Brazil’s largest private lender Itaú Unibanco Holding SA recently acquired a 49.9 percent stake for 5.7 billion reais, and Easynvest, part of Advent International’s private equity portfolio.
Toro is aiming to lure 500,000 clients over the next year. Kallas said 30,000 individuals had joined a waiting list for an account before Toro’s launch.
Since 2017, the fintech has raised 66 million reais ($17.09 million) from undisclosed investors.
Reporting by Paula Laier; Writing by Carolina Mandl; Editing by Bernadette Baum