Locaweb has raised over 1 billion reais in its initial public offering
Welcome to this week’s news round-up on the Brazilian innovation and technology ecosystem. Here are three key developments in Latin America’s largest economy during the week ending February, 7, 2020:
Two decades after it was founded, Brazilian Internet veteran Locaweb made its initial public stock offering (IPO) on Thursday (6). The hosted IT services company based in São Paulo is now publicly traded on the Brazilian stock market, raising more than 1 billion reais ($232 million). Of that total, 44% was paid to the selling shareholders, including venture capital firm Silver Lake, previously owner of a 18.97% stake.
The remainder will go towards the acquisitions – valued at about 2.6 billion reais ($602 million), Locaweb is understood to be in talks with at least 30 potential acquisition targets. As a result of the IPO, founders Gilberto Mautner and Cláudio Gora reduced their own stake from 17% down to 10.9%.
Despite facing some competition from sector giants such as Google in its core business, but it still retains the largest market share in hosting, with 21.6%. The firm also has cloud and datacenter offerings as well as other services such as VOIP telephony.
In yet another blow for the anti-gig economy debate, Brazil’s superior court of justice has weighed in for the first time on the issue of the relationship between Uber and the drivers that operate through the company’s platform.
Siding with the ride-hailing firm against a Brazilian driver seeking employment rights, the country’s second highest court ruled on Wednesday that drivers are independent contractors rather than employees of the startup. Uber, which has welcomed the decision, has often said it is a digital middleman rather than an employer, and those using the platform are aware of that arrangement.
According to the ruling, drivers are flexible in their schedules as they can log off the app whenever they want, with a take-home pay of up to 80% of fares paid by users, which describes a “partnership”. The decision was unanimous.
São Paulo-based secured lending fintech Creditas launched an online store that allows consumers to purchase higher value goods such as high-end smartphones through installments – even if they don’t have a credit card.
Employees of companies partnering with Creditas can use the service to buy goods in up to 24 installments deducted monthly from their pay at low interest rates. The platform launched with Apple devices, however Creditas plans to broaden the portfolio of products and services available through the store, with offerings ranging from MBAs abroad to smart fridges.
Since more than 45 million Brazilians don’t have a bank account or have access to credit, the startup is introducing different channels to access the pool of consumers excluded from the traditional lending system.
Highly anticipated to become one of Brazil’s next unicorns, Creditas is backed by SoftBank, with Vostok Emerging Finance, Santander InnoVentures and Amadeus Capital also among its backers.
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