Warburg Pincus invested USD100m in Sólides, Brazilian talent management platform. DGF Investimentos invested USD3.5m in August 2019, in the company’s first institutional capital.
(Reuters) – Private equity firm Warburg Pincus has invested $100 million in Brazilian human resources startup Solides for an undisclosed minority stake, adding a new company serving mid-sized and small companies in the country to its portfolio.
Solides provides human resources management software to 12,000 Brazilian companies, which have around 4 million employees. Solides’ valuation in the round was not disclosed.
Its co-Chief Executives Monica Hauck and Alessandro Garcia say proceeds will be used to expand product development and to fund potential acquisitions of rivals focused on HR management.
On top of fees for the use of software, Solides expects to increase its revenue with the sale of products such as training tools and life and health insurance policies, they added.
The use of the company’s HR packages has been reducing staff turnover and the time clients take to hire employees, Hauck said.
Warburg Pincus director Bruno Maimone said startups serving mid-sized and small companies in Brazil are expected to have high growth rates despite challenges for economic growth.
“These companies need to increase their use of technology to have better productivity,” he said in a video interview.
There are around 600,000 companies in Brazil with 30 to 1,000 employees, which are Solides’ targeted client base.
Warburg Pincus has investments in five similar HR management providers in the United States, Europe and China.
In its first funding round in 2019, Solides raised 14 million reais ($2.7 million) with DGF Investimentos.