Last year, two of Brazil’s most promising fintechs
, chose the Nasdaq—the tech-specialized stock exchange based in New York—to list their shares. Meanwhile, Banco Inter
remains an outlier, however, as the only fintech that chose to hold its initial public offering (IPO) at B3, São Paulo’s stock exchange.
Contemplating overall technology or software companies, B3’
s options remain limited. Consequently, B3 offers sparse coverage from specialized analysts or tech investors.
While Brazil is working to combat the nation’s fiscal chaos, the precedent set by the first trailblazers in New York demonstrated to other businesses that it is possible to follow an alternative path.
, Brazilian startup Agibank
’s CFO and Investors Relations Director, noted that going public abroad offers the advantage of having “access to a broader base of investors that do not trade on the B3,” which are also specialized in the technology business. Rodrigues also mentioned that due to the larger number of investors, the U.S. market liquidity is much higher than in Brazil, therefore helping shares reach higher prices (Brazilian Report
An EY advisory firm report
confirmed that last year, the three IPOs that took place at B3 amassed USD $2 billion in proceeds, with a median deal size of USD 801 million. On the other hand, NASDAQ and NYSE hosted 205 IPOs, with USD $52.8 billion in proceeds, and a median deal size of USD $111 million.
However, the process of going public in New York versus São Paulo tends to be much more extensive, as a result of more stringent legislation in the states.
A PwC report
comparing IPOs in Brazil and the U.S. show that almost 73% of companies listed in Brazil needed less than six months to go public. In the United States, the same process takes about six to nine months, plus a preparation period of 12 to 18 months.
The report also shows that costs are higher in the U.S., ranging from 11.7% to 4% of the amount raised in the IPO, dependent upon the size of the offer. The bigger it is, the cheaper it gets. In Brazil, fees range between 5.6% to 2.5%.