Most fintechs are highly efficient: they operate online, with no costly physical infrastructure. They launch, unencumbered by the legacy costs shouldered by their old-economy competitors, whose business they aim to steal.
Starting from scratch also offers technological advantages: their infrastructure is more up to date and the user experience is typically much better.
But, by and large, it is the very low cost base that gives them a competitive advantage: disruption comes from stripping out the fees that the previous generations of businesses levied to pay for their physical infrastructure.
There is, however, a subset of fintechs that now face having to get their hands dirty with bricks and mortar.
Creditas, the Brazil-based, SoftBank-backed secured-lending unicorn valued at $1.75 billion in its latest funding round, is one.
Its chief executive, Sergio Furio, explains that the company, which focuses on lending secured on car and real estate assets, is moving into the real world to manage the user experience, increase control of transactions that include physical interactions and improve the costs and performance of services that were being conducted by third parties.
For instance, it is opening a 30,000-square metre car reconditioning factory 10 kilometres outside the city of São Paulo that will be capable of handling 15,000 cars a month.
“There
