Fever SPAC, the so-called “blank check” IPO, begins to spread in Brazil and impact the market. THE Alpha Capital concluded this Tuesday, 23, its initial public offering in the Nasdaq, raising 230 million dollars (about 1.250 billion reais, at the exchange rate of the day). It is the first SPAC aimed at the technology sector in the country.
The special purpose acquisition company (SPAC) that took the funds will use them within 24 months to invest in a technology company in Brazil or other countries in Latin America. With the merger or acquisition of the slice, this company will go public, with publicly traded in Nasdaq.
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“There is an entrepreneurial class in Brazil, which was born in the last six, seven years, incredible. Outside of Silicon Valley, one of the most important technology clusters for the next ten years will be in Brazil,” he said Alec Oxenford, CEO and chairman of Alpha Capital, at EXAME Invest. “It’s something we’re already seeing in IPOs in recent months.”
“It is a unique moment for the technology sector in the country. The planets are aligning themselves so that there is a revolution, but some companies still lack ‘late-stage financing’,” adds the experienced entrepreneur. This gap is filled, according to him, with SPACs, which represent financial technology for companies.
Rafael Steinhauser, President and Director of Alpha, explains that ‘late-stage capital’ is abundant in the American market, but scarce in Brazil and Latin America.
This happens, according to him, because the traditional initial public offerings of technology companies are concentrated in Brazil and reach the order of 100 million to 200 million dollars (550 million to 1.1 billion reais). He states that, in general, institutional investors in the region are not yet used to investing in large technology companies, with multiples of up to 20 or 30 times the Ebitda.
Alpha Capital was co-founded by Oxenford and Steinhauser: they are two professionals with extensive experience in the technology industry and with complementary profiles – and both Argentines who live in Brazil.
Oxenford, with more than 20 years of experience as a serial entrepreneur, was co-founder of the Arremate.com sites, in the early days of the internet in the country – acquired in 2005 by Free market – and after S $. His most recent business as co-founder and CEO was letgo, a second-hand product site in the United States.
Steinhauser, in turn, was president of the Qualcomm for Latin America over the last decade, until July last year. He has over 35 years of experience in the corporate world in the area of technology, having also been president of Nortel Networks and yes Cisco Systems No brazil.
The company has experienced co-sponsors, such as Innova Capital, a FJ Labs it’s the Dr. Irwin Jacobs. Innova is a private equity and growth capital fund founded by Veronica Allende Serra, one of the most experienced investors in startups in the country.
Oxenford and Steinhauser report that they selected a pre-list with 50 technology companies in Brazil and in other countries in the region, such as Argentina, Colombia and Mexico.
And, based on a new assessment, there should be around six companies that will be studied in more detail, until a chosen one is reached, which, in turn, must meet some requirements of the SEC itself ( Securities and Exchange Commission), which regulates the US capital market.
“They are companies with a valuation probably between 750 million reais and 1.25 billion dollars, founders with incredible ‘track record’, important growth rates, excellent profitability, products etc.”, says Oxenford.
IPO model number two SPACs, Investors who decide to enter the offer rely on the expertise of managers to find, acquire and perform the IPO of a good company, usually small or medium sized. That is, the money is raised before the investor knows what he is buying, hence the name “blank check IPO”.
SPACs accounted for about half of the IPOs carried out in the American market last year: there were close to 250 offers that raised more than 80 billion dollars combined. Oxenford and Steinhauser say they see potential for strong growth in SPACs for investment in Brazil and are preparing for new technology offerings.