Investors: Viking Global Investors, Sunley House Capital Management, Riverwood Capital, Visa
Interview with: Chief Strategy Officer Marcelo Jacques
Conductor, a Brazil-based payments processor and card issuance provider for fintechs, recently raised a US$150m round led by Viking Global Investors, with participation from Advent affiliate Sunley House Capital, and follow-on from Riverwood Capital and Visa. Conductor also represents Visa Ventures’ first investment in Brazil, when they committed an undisclosed amount in 2018.
LAVCA interviewed Conductor’s Chief Strategy Officer Marcelo Jacques to learn more about the company’s current standing amid the C19 crisis and its roadmap towards becoming a publicly traded company.
LAVCA: Conductor was founded in 1997. Can you share with us some numbers that can help us better understand the company’s growth and scale in recent years?
We have been a very high-growth company since 2012. We have seen a Compound Annual Growth Rate (CAGR) of 40-50% for the past eight years. We now enable more than 200 companies to offer payment and digital banking solutions to their clients, while processing more than R$10b in monthly transactions and serving 100m customer accounts. It is important for us to say that our scaling trajectory has not been based on achieving growth at all costs; we are a profitable business and always look for the correct balance between growth and profitability.
LAVCA: How is Conductor thinking about allocating the US$150m just raised through this round of financing?
Marcelo: We do not have a formal allocation for the proceeds. The ultimate allocation will depend on the opportunities that arise. What we can say for sure is that we are going to continue expanding our business aggressively. Regardless of the organic or inorganic nature of the growth opportunity at hand, we will allocate resources in any project we believe is adherent to our vision and that strengthens our position as the leading payments processing and banking-as-a-service technology provider in Latin America.
LAVCA: Conductor acquired Muxi, a Brazilian fintech providing Point of Sale (POS) transaction capturing technology for SMEs, back in August. How has Conductor integrated Muxi during C19, and how do you see Muxi’s technology adapting to the post-C19 retail landscape?
Marcelo: Given the timing of Muxi’s acquisition, we had already planned the post-deal integration and took into account any C19 impacts into the day-to-day business of the company. The teams are working very well together, and we are excited about all the capabilities Muxi brings to our platform and offering.
Regarding the technology and the impact of C19 to the retail landscape, we believe that this crisis has accelerated payment digitalization throughout all markets, and has been a great driver for both e-commerce and digital payments in physical points of sale (through cards, QR Codes, and mobile wallets). Latin America’s business operations are still highly enabled by cash transactions, and the increase in usage of electronic payments was already a trend that is now going to be accelerated, which is very positive for us.
LAVCA: Conductor CEO Antonio Soares shared with Reuters that this might be the last round of private capital the company raises before going public. What are some of the key milestones the team is expecting to meet in the region before considering an IPO?
We see the act of going public as a natural consequence of the work we are doing. We are focusing on building a great business, with great people and exciting prospects to keep growing and expanding, and believe this is the type of business public market investors would be excited to invest in. In terms of milestones, growth in other Latin American geographies is one of our top strategic priorities, and we definitely expect to have a more relevant presence in other markets outside Brazil prior to listing.