As its startup market accelerates, Brazil could be in for an IPO bonanza

Brazil’s startup industry is soaring, and the country’s local stock market may reap the benefits. Brazilian companies rose the highest funding in a single quarter in Q1 2021, according to KPMG statistics, when $1.4 billion invested in local digital start-ups. That record held until the second quarter of 2021, when Brazilian entrepreneurs raised $2.7 billion.

However, inflows are just half of the startup equation. In recent years, noteworthy acquisitions in Brazil have included Twilio’s purchase of Teravoz in January 2020 and Etsy’s purchase of Elo7 for more than $200 million in June. 

Earlier this year, magazine Luiza paid $528 million for Kabum, a Brazilian e-commerce company. However, acquisitions are only one method of obtaining liquidity. Another example is initial public offerings (IPOs). 

The good news for Brazil and its startup ecosystem is that, despite a long history of a lack of technology public offerings on local markets, the IPO market for Brazilian digital businesses may be poised for more activity.

As its startup market accelerates, Brazil could be in for an IPO bonanza

GetNinjas, a website for hiring local workers for domestic tasks including as plumbing and painting, went public on the B3 market in So Paulo earlier this year. In addition, it is not the only one.

According to research, the Brazilian IPO market is evolving. Last year, TechCrunch reported that only two of the 56 IPOs in Brazil in the decade running up to 2020 were technology businesses. The number of technology businesses listed in the nation has lately increased to at least 16, up from only four in 2019. Will the trend of Brazilian technology companies going public in their own country continue? On the other hand, will IPOs in the United States play a key role for the country’s most successful IT companies?

With So Paulo-based finance powerhouse Nubank on the verge of an IPO and more money than ever invested in the country’s current generation of startups, all of which must aim to the most renowned of exit pathways, the question is not frivolous. Brazil is also producing new unicorns, with at least four achieving unicorn status this year alone.

Even that statistic is out of date: Nuvemshop, a Brazilian e-commerce business, has announced a fresh $500 million round, valuing the company at more than $3 billion. 

The Exchange spoke with GetNinjas CEO Eduardo L’Hotellier about its IPO and Renata Quintini of Renegade Partners, a venture capital firm, about what’s happening in the country to better understand the recently expanding number of domestically listed Brazilian technology offerings and what could be ahead for the country’s startups. We will base our decisions on data as we go. Let us go on an adventure in Brazil!

The number of public firms in Brazil influenced both sector-specific and macro factors, and is now low relative to historical highs. When we think about what is driving greater technology products in Brazil, we need evaluate both wider macroeconomic concerns and what is going on in technology particularly.