(Tech Crunch) Global printing heavyweight Vistaprint has acquired a US$25m minority stake in Brazilian web-printing startup Printi. The purchase marks Vistaprint’s entry into Latin America, after assuming market leadership in the U.S., Europe and Asia.
Vistaprint bought out all of Printi’s investors’ stake and a portion of the founders’ stake in the company, but the founders still maintain a majority stake of the company and control the board. “They wanted to acquire us 100 percent but we wanted to make it closer to what a VC deal would look like,” said co-founder and co-CEO Mate Pencz tells me on a call from Recife. “We’re staying on board and staying completely independent.”
Vistaprint’s CEO Robert Kearne and VP of Portfolio Management Jeremie Profeta will join Pencz and his co-founder and co-CEO Florian Hagenbuch on the board. “Our investment is an important strategic step and we look forward to growing aggressively in Brazil,” said Profeta.
The investment comes at precisely the time Printi is outgrowing its model of outsourcing fulfillment to large printing factories, and the founders decided to vertically integrate production and construct their own printing factory in São Paulo.
“We had VC term sheets, but it came down to the fact that our business is a little unusual as a tech company,” says Pencz. “We have a large manufacturing component, and in a lot of the VC conversations we were having, they did not understand the factory component. We admire the manufacturing expertise Robert has developed at Vistaprint and thought this could be a valuable asset to us once Printi reaches a certain scale.”
Printi made $3 million in revenue for 2013, and is on track to exceed $10 million this year, fulfilling about 6,000 orders per month. A source close to the company estimates gross margins at 40 percent. Pencz says business has grown gradually, with the help of high repurchase rates from loyal customers, and has been operating at more or less break-even since last year.
Printi’s only prior outside investment (Pencz and Hagenbuch put in about $50,000 of their own money to build the first website) was a $1.2 million Series A round with participation from Greenoaks Capital, Palantir co-founder Joe Lonsdale, serial Brazilian entrepreneur Fabrice Grinda and Groupon Brazil co-founder Florian Otto.