RIO DE JANEIRO, BRAZIL – Vórtx, an infrastructure fintech for the financial market, plans to launch an IPO outside the country, possibly by next year. After the recent Series B investment of R$190 million by the American private equity firm FTV Capital, the company wants to expand its leadership in the back office area, through the expansion of its technology and mergers and acquisitions strategy. Its goal is to buy two competitors specialized in fund management, within the second half of 2021.
In April, it acquired control of Simplific Pavarini, which has been providing fiduciary services since 1994 in debt issues and other functionalities in Corporate Trust. With the acquisition, Vórtx now has more than R$300 billion in assets under custody in its portfolio and takes the lead with more than 50% of the country’s Corporate Trust market.
In addition, it announced an investment in the global fintech Parfin to expand its operations in the crypto-asset market, bought the systems company Vorasys/ BCInf, and invested in the Brazilian startup Preparo, focused on hiring and recruitment for internships and first jobs.
Revolution in the back office
While most players today are dedicated to investing technology with a focus on distribution, investment sales and access to individuals, the infrastructure platform to serve the capital markets Vortex is 100% focused on the back office controlling, processing and settling all investments. “Since our conception, we never compete with our clients, but offer everything they don’t have in house,” says Juliano Cornacchia, CEO and co-founder of Vórtx.
With operations in the B2B segment, Vórtx serves banks, brokerage houses and investment managers. Among its main clients are Bradesco BBI, BTG Pactual, Patria, Credit Suisse, among others.
The fintech’s objective is to transform the traditional back office market into something revolutionary with the technological platforms developed to provide services. Last year, it launched VX Meetings, a platform with full support for digital meetings, Vórtx One, focused on Fund Trust, and VX Informa+, for Corporate Trust.
Platform evolution
The Vórtx One platform was considered the company’s first evolution, offering visibility to the fund manager of the entire process by means of a dashboard, which represented a gain in efficiency. In the second phase, it started to make changes in the platform itself, while the moment is now to incorporate the acquired management products.
To have access to the fintech’s services, the client pays a percentage on the managed assets added to the subscription to enter the platform and choose the type of service he wants. “Our goal is to deliver a complete portfolio of management tools that even involves ERP,” he explains.
The corporate debt area, which accounts for 40% of the fintech’s business, suffered a decline with the pandemic, while the funds area, 60%, continues to grow. In order to efficiently serve the corporate debt market, it created an investment community, which connects all those involved in a debt issue, on the same platform. This solution helps monitor the health of the paper, one of the most important jobs developed by the fiduciary agent for the benefit of investors.
“We have 1,100,000 active series of debt paper, which together involve about 250,000 bonds to be monitored. Imagine what was lost when this was done in an Excel spreadsheet sent by email,” recalls the CEO of Vortex. One of the fintech’s biggest competitors operates with about 70 employees to cover 1,200 series of active debts. Thanks to technology, the fintech has a lean team of only 17 people to perform the same function.
The B2C challenge
The challenge now is to operate in the B2C [business to customer) segment. For this the company has gathered a million investors in this platform, which has R$135 billion in assets in custody, and has made adjustments in its technology team. “At some point it will be cheaper for clients to outsource our services than to develop in-house,” he says.
Opportunities abound. Analysts estimate that the country currently has a capital markets industry, especially funds, of approximately R$6 trillion. Of this total, R$ 4 trillion is concentrated in the large banks, which provide their own back office services. “Our focus is to attend the market share corresponding to the R$2 trillion of independent cases that are lost,” says Cornacchia.
The big banks, which have undergone a very intense digitalization process on the front end, also represent a future business opportunity for Vortx, which is already in talks with some of them, according to the fintech’s CEO.
Source: Tele Síntese