Brazil’s GetNinjas startup heads into the physical world in marketing and takes to the streets

RIO DE JANEIRO, BRAZIL – The startup debuts on the Brazilian stock exchange on May 14 with a base offering that could raise up to R$807.35 million

A week and a half before debuting on the Brazilian stock exchange, service app GetNinjas is coming out of the shadows. The startup, founded in 2011 by Eduardo L’Hotellier, began its first offline marketing campaign on Tuesday, May 4. During the first two weeks of May, the company will place its brand on dozens of street clocks and TVs in commercial and residential buildings.

The strategy, designed by marketing director Bruno Morano, who joined the company in October last year, aims to emphasize the brand’s strength with customers and also introduce it to a new audience. “The services market in Brazil is essentially offline, and at the same time this is a very interesting movement that large digital companies are following as a way to reach an even wider audience and work on brand recognition,” says the director.

GetNinjas is a marketplace that connects consumers with over 500 types of service providers, from bricklayers to psychologists and personal trainers. The company operates in more than 3,800 cities in the country and, last year alone, mediated over 4 million service requests, transacting over R$963 (US$185) million on its platform.

While transportation marketplaces such as Uber and 99 charge a fee per transaction, GetNinjas follows a model that pays per business opportunity presented to registered service providers. When a customer seeks a service, the platform notifies the registered professionals in that segment about the opportunity. If they want to, they may accept the request using pre-purchased virtual currencies and then negotiate with the client. According to the brochure, each opportunity costs an average of R$14.20 for professionals.

The company has defined the price range of its shares between R$24.9 and R$33.50, and may raise between R$600 million and R$807.35 million with its initial public offering (IPO) on May 14th.

Read also: Brazil’s GetNinjas startup partners with Banco Pan to offer account, insurance and credit

The operation has resource managers Verde, Miles and Indie as anchors. The three guarantee a total of R$175 million for the offering, as long as the price comes in at R$24.90. In case it exceeds this level, even if it is within the suggested range, the asset managers can buy the shares, but they are not obliged to do so. The venture capital houses that helped finance the company’s life up to this point will sell part of their shares: Monashees, Kaszek, Evan and Tiger.

To continue growing, the startup depends on its ability to attract more users and service providers to the platform. It is no wonder that it says it will use about 65% of the proceeds from the primary fundraising – just over R$430 million, considering the center of the price range – to invest in marketing. The remaining capital will be allocated to hiring people, and only the smallest portion, 15%, for cash reinforcement, according to the information in the offering brochure.

GetNinjas is a snapshot of what startups seek when they go for an IPO. Some have consolidation as their main focus. This is particularly the case for fintechs. For these, the listing itself makes a difference, because shares become an acquisition currency. But all of them, without exception, see in the access to capital a way to finally make the marketing investments they think they need and still recruit new talent. Restraining advertising and personnel are the two main ways to keep expenses within a tight cash flow scenario.

April has proved that it is not as easy to secure offers as it was at the start of the year. The pricing for the operation is scheduled for May 12th and the debut on the B3 is scheduled for May 14th.

In addition to investments in offline media, the company’s marketing investments should intensify its partnerships with digital platforms, such as Rappi, and also with retailers. Thus, when buying a product that needs installation, for example, the customer would be directed to hire a service provider by GetNinjas.

As for the registered professionals, the startup plans to intensify its relationship by becoming a digital bank for service providers, as described in the brochure. Therefore, the company would expand its product offering, bringing in new verticals that would add new revenue lines and result in potential margin increases. Currently, GetNinjas provides partners with a payment terminal, digital account, credit, and insurance.