Advent invests $430 million in Brazil payments firm Ebanx before IPO

SAO PAULO (Reuters) - Funds managed by Advent International are investing $430 million in the Brazilian payments company Ebanx, financing its growth in Latin America ahead of an initial public offering planned for the coming months, Ebanx Chief Executive said on Tuesday.

CEO and co-founder Joao Del Valle said the company plans to use the proceeds from acquisitions to further expand operations in countries such as Mexico, Colombia and Argentina. Advent is also buying a stake from Ebanx’s existing investors.

The companies did not disclose Ebanx’s valuation or the size of the minority stake acquired by Advent.

Founded in 2012, Ebanx focuses mainly on processing payments from clients of global websites like Alibaba Group Holdings’ AliExpress retail service, homesharing site Airbnb and music-streaming service Spotify Technology in Latin America. Globally, one of its peers is the Dutch company Adyen NV.

This year Ebanx is likely to process more than $7 billion in total payments, doubling from 2020, Del Valle added.

The deal is the latest example of how busy dealmaking activity is for Brazilian financial startups, which are luring investors beyond traditional venture capital funds. Last week, Nubank announced a $750 million funding round led by Warren Buffett’s Berkshire Hathaway.

Advent’s Latin America, global and technology funds, besides its affiliate Sunley House, are investing $400 million in Ebanx at this moment, and the private equity firm has also committed to invest an additional $30 million in Ebanx’s IPO in the U.S. Ebanx is likely to launch an IPO by the beginning of 2022, Del Valle said.

As part of the deal, Advent is going to appoint a director to the company’s board, said Brenno Raiko, a managing director at Advent in Brazil. “This is Advent biggest check for a technology company in Latin America,” he added.

Reporting by Carolina Mandl