Vinci Partners Impact acquired a minority stake in DMCard, a Brazilian low-income credit provider and card issuer for retailers, for ~USD20m.
(Press Release) – Vinci Partners Investments Ltd. (NASDAQ: VINP) (“Vinci Partners”, “we”, “us” or “our”), the controlling company of a leading alternative investment platform in Brazil, announced today that “Vinci Impacto e Retorno IV”, or “VIR IV” (“the Fund”), the Impact family of funds managed by Vinci Partners’ Private Equity strategy, entered an agreement to invest a R$ 100 million in an investment round for the acquisition of a minority stake in DM Card (“DM” or “the Company”), a fintech focused on credit to low income population and one of the main Private Label card issuers to retailers in Brazil.
VIR IV has a unique strategy in Brazil, with a dual mandate to generate favorable market returns as well as impact, through the acquisition of minority holdings in small-and-medium sized Brazilian enterprises, that exhibit growth potential and clear measurable environmental, social and governance, or ESG, goals. This transaction marks VIR IV’s fifth investment, resulting in a 43.7% gross allocation of the Fund’s R$1 billion in total capital commitments.
DM Card was founded in 2002, focusing on Private Label credit card. Nowadays, the business holds an extensive geographic footprint, having presence across 14 states in Brazil and partnerships with over 1,100 small and medium-size retailers within +2,300 stores through the country.
From VIR IV’s investment contribution, we expect to support DM Card to amplify its impact and become the financial services company of choice for low-income classes, being a reference on credit and productive microcredit to entrepreneurs, providing simple, tailored, and accessible solutions, promoting client diversity, providing financial education, and contributing to economic development.
José Pano, partner and head of the VIR strategy for Vinci Partners, said, “We are excited to partner up with DM, a company with extended expertise on credit for low-income clients that translates into a proven and profitable business model and foreseeable expansion. We believe there’s an opportunity for the Company to develop new products and channels as well as to become a digital-focused and omnichannel provider with a client relationship-oriented model. VIR’s investment creates a positive impact aligned with the Fund’s impact strategy, such as the promotion of financial inclusion to low-income individuals and the development of specific credit programs destined to education, home renovation and healthcare.”
About Vinci Partners Private Equity
Vinci Partners’ Private Equity strategy has a sector-agnostic approach focused on growth equity investments in Brazil. The main strategic focus is value creation by promoting revenue, productivity and profitability growth through significant operating and management changes in portfolio companies. The private equity strategy invests through two sub-strategies: Vinci Capital Partners, which focuses on control and co-control investments, and Vinci Impact and Return, that focuses on minority investments in small-to-medium enterprises with dual mandate of generating ESG impact as well as market returns.
About Vinci Partners
Vinci Partners is a leading alternative investment platform in Brazil, established in 2009. Vinci Partners’ business segments include private equity, public equities, real estate, credit, infrastructure, hedge funds, and investment products and solutions, each managed by dedicated investment teams with an independent investment committee and decision-making process. We also have a financial advisory business, focusing mostly on pre-initial public offering, or pre-IPO, and merger and acquisition, or M&A, advisory services for Brazilian middle-market companies.
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