Brazil’s Vtex lines up LatAm investments

Brazilian e-commerce solutions provider Vtex plans to invest US$20mn in Latin America, excluding Brazil, over the next four years, company executives said at an online event organized by the firm.

The money will be used mostly for the development artificial intelligence, omnichannel activities, logistics and B2B products, as well as to expand the company’s footprint in Argentina, Chile, Colombia and Mexico.

The expansion drive in the region includes plans to open a software development center in Mexico in the coming months, as the firm’s president for the region, Santiago Naranjo, told Mexican media recently. The center will have 30 programmers and will develop solutions specifically for the local market.

Bolstered by stay-home measures ordered by authorities to respond to the health crisis, Vtex has seen demand for its e-commerce solutions soar in recent months and has advanced more rapidly with many of the projects that it planned to roll out in the next three or four years. 

M&As

The company is also betting on acquisitions for growth, having snapped up two companies in the second quarter: AI firm Biggy and logistics company dLieve. 

The deals led to the launch of the products Vtex Search, for customization of offers, and Vtex Tracking, for tracking deliveries.

Vtex raised US$140mn in an investment round led by SoftBank late last year, but these two transactions were funded with the company’s own cash. 

Vtex provides solutions for around 2,500 stores in 32 countries. Since its creation in 1999, the group has acquired 10 companies.

TOTVS

Since May 2019 Vtex has had a JV with Brazilian software group Totvs to offer business digitization solutions to e-commerce companies.

As part of the agreement, Vtex spent 21.1mn reais (US$3.8mn) to buy 70% of the capital stock of Totvs-controlled company Ciashop, a subsidiary focused on the e-commerce platform business.

At its second quarter earnings conference, Totvs said that no material gain related to the JV with Vtex has yet been seen.

"The large majority of the organic revenue contribution comes from the portfolio we already had. Of course, Vtex has had a very significant acceleration. The number of clients we have is significant… but we’re still talking about relatively minor revenue on average," said Totvs CEO Dennis Herszkowicz.

"From the viewpoint of the number of clients, we have had an acceleration and, at present, we’re at a level we consider to be good. When it comes to values, this still is not very representative because there’s a growth curve regarding the use of the platform by the client," he added.

NEW APPOINTMENTS

Vtex also announced Dario Schilman as new country manager for Argentina, Bolivia, Paraguay and Uruguay. Schilman and Roney Almeida, the other executive VP for Latin America, will report to the regional president Santiago Naranjo.