Brazil’s Semantix mulls M&As, IPO and fundraising round

Brazilian big data, analytics and AI developer Semantix is mulling acquisitions this year as it negotiates fundraising rounds with private investors, CEO Leonardo Santos (pictured) told BNamericas.

The company is also studying an IPO, eyeing the record number of companies getting listed on the Brazilian stock exchange.

The software developer just completed the acquisition of fellow API integrator company LinkApi for over 100mn reais (US$17.8mn), paid in cash. The transaction gave Semantix, which already has operations in Mexico and Colombia, a larger footprint in Latin America.

LinkApi operates in 15 markets, selling to around 150 companies. Since 2019, it was part of the startup portfolio Telefónica's Wayra Brasil accelerator invested in.

The M&As considered for this year will focus on the Brazilian and US markets, Santos said.

With LinkApi's takeover, Semantix expects to enhance its portfolio of digital transformation solutions to industry verticals. Currently, Semantix chief verticals are finance, retail, telecom, health and utilities. Big clients include Bradesco, Itaú, Cielo, Telefônica Brasil, Claro, Carrefour and Cargill.

Another strategy is to invest in verticals such as agribusiness. With the data connection platforms and the arrival of 5G, this sector is expected to enter a new digital transformation stage due to growing need for connectivity, accessibility, IoT and AI services, according to Santos.

With the LinkApi acquisition, Semantix employs 450 professionals and intends to hire 70 more this year. 

Still in a ramp-up stage (the company was founded in 2017), Semantix reported an 80% year-over-year growth last year, to over 200mn reais in sales, fueled by pandemic-accelerated digital needs. 

The forecast for this year is 50% organic growth.

TECH M&As

In the first two months of the year, the Brazilian market recorded 170 M&As, among announced and completed deals, worth a total 64.9bn reais, according to Transactional Track Record (TTR).

The figure represents an increase of 183% in value terms and a reduction of 18% in the number of transactions over the same period of 2020, said TTR.

The most active sector was technology, with 97 transactions. The sector accounted for 68 of February's 95 M&As alone, involving 20.9bn reais.