Brazilian tech companies preferring New York to São Paulo for their IPOs

As Brazil’s startup environment flourishes and becomes one of the most important in Latin America, investors are looking for options to get involved in the opportunities created by the growing industry. Becoming a shareholder is one of the most practical ways to benefit, but it seems that tech companies are preferring to take their chances up north, especially in the U.S., further from Brazilian investors’ reach.

Last year, two of Brazil’s most promising fintechs, PagSeguro and Stone, chose the Nasdaq—the tech-specialized stock exchange based in New York—to list their shares. They were also followed by ed-tech company Arco Educação.

Meanwhile, Banco Inter was the only fintech to hold its initial public offering (IPO) at B3, São Paulo’s stock exchange—and it remains an outlier. Even considering overall technology or software companies, there’s just a handful of options on B3, such as Linx, Totvs and Sinqia. Consequently, there’s also sparse coverage from specialized analysts or tech investors.  

Fintech Agibank was set to join them, but the company decided to halt the IPO process, amid a cloudy macroeconomic scenario that reflected poorly on Brazilian assets last year.

“We kickstarted the IPO process in 2018. All was well until we had a significant deterioration of market conditions for emerging markets, spurring a risk aversion mood abroad. Then, the truckers’ strike helped to make the case worse for Brazil. [B3] reached its low for 2018 in the very...