Tech Roundup: Digital players thrive amid Brazil’s IPO boom

You’re reading The Brazilian Report’s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: new tech players thrive in Brazil’s IPO spree, the growth of contactless payments in Brazil, and the federal government’s booming spending in IT. 

IPO boom brings Brazilian investors closer to digital players

2020 will be remembered by Brazilian capital markets as the year of the IPO boom. As of October, at least 19 companies have held initial public offerings on São Paulo stock exchange B3. But unlike IPO sprees of the past, this one has a tech element that may give investors unprecedented opportunities.

Markets ready for an IPO boom. In its latest offer, digital second-hand marketplace Enjoei offered its shares within the BRL 10.25 to BRL 13.75 price range. If successful, the sale may raise BRL 1.1 billion. Another newcomer is broadband provider Triple Play, which aims to reach up to BRL 1.7 billion on its offer. In September, at least four other digital players announced plans for an IPO:

• Cashback startup Méliuz, wine subscription service Wine, digital estate agent Housi and Mosaico, the owner of price comparison platforms Buscapé, Zoom, and Bondfaro, have all applied for IPOs at B3.
• The case for tech IPOs in Brazil has been supported by prior success stories. Since going public in February, website hosting company Locaweb’s shares have risen by over 200 percent.

Tech retailers. In Brazil, the biggest tech players are often e-commerce companies and this IPO wave is no different. According to Diogo Lupinari, CEO at tech company Wevo, which works to integrate systems and data, retailers are becoming so focused on tech in Brazil that “it’s even unfair to say they are not tech players.” In his view, the new entrants will beef up an incipient sector, but which already has strong players such as software providers Totvs and Linx, as well as major retailers. 

Is Faria Lima the new Wall Street? The decision to go public in São Paulo is a new trend for domestic tech players. While unicorns such as Nubank and Gympass have resisted public offers, finding plenty of venture capital funding available, other tech players such as XP, Inc. and...