The stock market has turned too volatile for Ebanx’s IPO plans. The Brazilian fintech firm, backed by private equity company Advent International, announced on Friday that it has delayed its U.S. initial public offering because of concerns associated with recent market volatility. However, the payments fintech company clarified in an email statement that: “In line with the excellent results it recorded last year, EBANX remains attentive to the best market moment for an eventual IPO.”
According to people familiar with sources, Ebanx is not planning to go public in the first half of this year as expected in the past. Equity markets dropped drastically during the beginning of the year, with the S&P 500 plunging 5.3% in January while the tech-heavy Nasdaq Composite Index fell 9%.
In October 2021, Ebanx was identified to have confidentially filed paperwork with the U.S. Securities and Exchange Commission for a U.S. IPO. In May last year, the first reports came out that Ebanx started preparations for a potential U.S. listing.
The fintech company is seeking a valuation of over $10 billion in a listing. In December last year, Ebanx acquired Remessa Online, a Brazilian-based international money transfer platform, for $229 million to grow its payments business. The Latin American payments giant made the acquisition six months later after Advent International equity firm invested $430 million in Ebanx to fund its growth plans before the proposed IPO.
Last year, Ebanx processed more than double the payments volume of what it made in 2020. Founded in 2012, Ebanx allows clients of global companies including Spotify Technology SA, Uber Technologies Inc, Airbnb Inc, among others to connect to payment methods in Latin American countries like Argentina, Colombia, Mexico, and Brazil.
Timing Is Everything
While Ebanx has postponed plans for an initial public offering, NuBank, a Brazil-based neobank, recently went public in the U.S. Nubank listed its shares on the New York Stock Exchange in December last year, a move that made the company’s value stand at $50 billion. The valuation makes the fintech bank to become the most valuable financial institution in Latin America.
Meanwhile, Brazil’s central bank recently put the brakes on tougher regulations on fintech firms after traditional banks cried foul, urging the regulator to bring highly successful fintech firms into line. However, Brazilian authorities responded that they would attempt to continue encouraging startups because fintech companies are bringing innovation and increasing competition that makes the big banks improve their services.
