{"id":17800,"date":"2020-11-24T09:58:32","date_gmt":"2020-11-24T05:58:32","guid":{"rendered":"https:\/\/techxmedia.com\/?p=17800"},"modified":"2020-11-24T11:43:45","modified_gmt":"2020-11-24T07:43:45","slug":"will-brazils-roaring-20s-see-the-rise-of-early-stage-startups","status":"publish","type":"post","link":"https:\/\/techxmedia.com\/en\/will-brazils-roaring-20s-see-the-rise-of-early-stage-startups\/","title":{"rendered":"Will Brazil\u2019s Roaring 20s see the rise of early-stage startups?"},"content":{"rendered":"\n

Since 2007, the<\/strong> number of publicly listed companies in Brazil has decreased from 400 to just a little over 300<\/a>.<\/p>\n\n\n\n

In the past six years there were only 21 IPOs \u2014 an average of just 3.5 public exits per year; by 2019, even Iran had more listed companies than Brazil<\/a>. Global capital markets are heated given pandemic stimulus packages and low interest rates worldwide, but in Brazil the boom comes with a special feature: in Q3 2020, there were 25 primary and secondary equity offerings, and this year is on track to be the most active in history both in number of deals and dollar volume.<\/p>\n\n\n\n

The most important event, however, is not necessarily the reversal of a shrinking public market but the fact that startups are issuing stocks for the first time, a dramatic change for a market previously dominated by industries like commodities and utilities.<\/p>\n\n\n\n

Growth versus value: Revert the shrinking market and internet companies<\/h2>\n\n\n\n

Not only is Brazil\u2019s IPO market roaring, the waitlist is even more impressive: More than 47 companies have filed at CVM<\/a> (equivalent to the the Securities and Exchange Commission) to issue equity and are waiting for approval. In other words, the IPO is equivalent to more than 15% of the number of publicly listed companies. In the first half of October, six companies were approved to issue equity<\/a>. Obviously construction and retail names are still predominant as they take advantage of the lower rates, but the main novelty are new entrants in internet and technology.<\/p>\n\n\n\n

In the past decade,\u00a0there were 56 IPOs in Brazil and only two were in the software space, both in 2013.<\/a>\u00a0That is a reflection of the profile of the investors who dominate local markets, which are used to allocating assets to companies in sectors like oil, paper and cellulose, mining, or utilities. Historically, publicly listed companies in the country were value plays, a few of them had significant exposure to the domestic market and derived a significant share of revenue from commodities and exports.<\/p>\n\n\n\n

As a result, companies that focused on the domestic market or on growth were never quite embraced by local investors. Many investors deploying capital in Brazil were mostly foreign and very risk-averse to the dynamics of the domestic market; in 2007, when Brazil went through a similar IPO boom, 70 percent of the demand for equity offerings came from foreign investors.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Since 2007, the number of publicly listed companies in Brazil has […]<\/p>\n","protected":false},"author":40,"featured_media":17802,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[5449,5450,5451,2001],"contributor":[],"class_list":["post-17800","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other-tech-events","tag-brazil","tag-brazils-roaring-20s","tag-exports","tag-startups-2"],"featured_image_src":"https:\/\/techxmedia.com\/en\/wp-content\/uploads\/2020\/11\/GettyImages-464458641.jpg","author_info":{"display_name":"Techx Admin","author_link":"https:\/\/techxmedia.com\/en\/author\/techxadmin\/"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/techxmedia.com\/en\/wp-json\/wp\/v2\/posts\/17800","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/techxmedia.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/techxmedia.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/techxmedia.com\/en\/wp-json\/wp\/v2\/users\/40"}],"replies":[{"embeddable":true,"href":"https:\/\/techxmedia.com\/en\/wp-json\/wp\/v2\/comments?post=17800"}],"version-history":[{"count":0,"href":"https:\/\/techxmedia.com\/en\/wp-json\/wp\/v2\/posts\/17800\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/techxmedia.com\/en\/wp-json\/wp\/v2\/media\/17802"}],"wp:attachment":[{"href":"https:\/\/techxmedia.com\/en\/wp-json\/wp\/v2\/media?parent=17800"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/techxmedia.com\/en\/wp-json\/wp\/v2\/categories?post=17800"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/techxmedia.com\/en\/wp-json\/wp\/v2\/tags?post=17800"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/techxmedia.com\/en\/wp-json\/wp\/v2\/contributor?post=17800"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}