Contxto – Brazil continues to be a hotbed of investments in investment startups.
Today (21), Ideal, a brokerage platform announced it closed R$100 million (~US$18.4 million) in a Series A led by Kaszek Ventures.
It will use the funds to scale and connect its products with retailers.
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Ideal tailwinds
Ideal isn’t a platform for individuals but rather a tool for institutional investors. Besides acting as an intermediary for acquiring securities listed on the Brazilian stock exchange, it also offers relevant market data.
And unlike your traditional brokerage platform, all its processes are digitized with zero human intervention. For Ideal this means investors can access a more efficient, secure, and inexpensive experience.
According to the fintech, it’s been profitable since day one and is the third-largest broker in Brazil by volume of assets it handles. What might be more impressive is the fact that it’s been operating for less than 18 months.
All of which helps understand why one of the biggest names in Latam VC was interested in investing.
With all that it’s achieved, it’s now turning to a new industry.
“We are currently developing our project for retail investors, always mindful of our mission: to provide the best tech infrastructure, to empower customers, and eliminate conflicts of interest by creating a win-win mindset that benefits clients and the service provider,” says Nilson Monteiro, CEO at Ideal.
Turning up the investment heat
Startups and VCs alike want to jump on the gravy train that is brokerage solutions in Brazil.
If you need a quick refresher on what’s been happening the last couple of months, check out these articles:
- June: XP Inc. bought Fliper, a fintech specializing in compiling investment data
- July: Brokerage platforms Warren and Magnetis each raised investment rounds for over US$10 million
- July (still): Fintech Neon acquires brokerage firm Magliano Invest
- September: Nubank acquires Easynvest
In the face of coronavirus and economic uncertainty, the Central Bank of Brazil has been reducing its interest rates and as of last Wednesday (16) it stands at 2 percent.
This has made traditionally “safer” investments (like government bonds) less attractive. And Brazilians are instead opting for more risky or complex products like those listed on the stock exchange.
These considerations partially explain the brokerage boom in recent months.
In any case, considering the world is still trying to make it through the pandemic, it’s likely Brazil’s low interest rate will remain practically as is for what’s left of the year. As a result, expect more brokerage-related action for what remains of 2020.
But what do you think? How long will this bonanza in brokerage platforms last?
Related articles: Tech and startups from Brazil!
-ML
