IFood’s controlling shareholder Movile says there are no short-term plans for IPO

SÃO PAULO, BRAZIL – At the beginning of March, giants Nubank, Mercado Pago and Google teamed up with five other companies in the financial market (Creditas, Banco Inter, Grupo Movile, Hash and Iugu) to announce the creation of Zetta, a new association which hopes to innovate the financial sector and digitize the economy. The news of the association rekindled rumors of a possible IPO by one of the group’s most prominent members: the Movile group.

For the past few months, despite recurring denials by its top executives there has been strong speculation that IFood or even the entire Movile group would open its capital in the near future by conducting an IPO (Initial Public Offering).

According to Movile’s CEO Patrick Hruby many people see an IPO as an end in itself, an end goal. He disagrees.

“An IPO is not an end. It is a means to raise money to invest and grow, and it is an expensive means, by the way,” said Hruby last year during a video chat promoted by financial daily Valor Economico.

“There are regulatory costs and costs of legislation to be a public company, that need to be weighed, and we do this analysis from time to time,” said Hruby, stressing that it is not in the group’s short-term plans to open up any of its companies to public capital.

According to the executive, Movile has grown both organically, with investment in marketing and technology, and inorganically, through mergers and acquisitions. The group also has relied on significant capital investments from Prosus, a company headquartered in Amsterdam and one of the largest technology investors in the world.

“Today, our understanding is that we have our own resources and generate resources and do not seek an IPO,” he explained.

Movile’s Chief of the Board and one of its co-founders, Fabricio Bloisi agrees. “We are capitalized and making several investments. It is not the time now; (but) It is a conversation that we have in the Board and that can be reevaluated,” said Bloisi during an interview to CNN Brasil in November 2020.

Created almost 20 years ago under the name Intraweb, Movile helped pave the way of the emerging sector of the cellular telephone system in Brazil. At the time, Movile was an SMS and ringtones company and eventually migrated to mobile apps in the segments of children’s videos, online deliveries and online payments. According to the holding company, its six subsidiary companies “impact the lives of 1 billion people around the world” through their applications.

Movile became known to the Brazilian consumer in 2013, when it invested US$2.6 million in a food delivery system known as iFood. At the time, iFood had 30 employees and delivered just under 39 million orders.

By 2019 iFood had become Latin American’s largest food delivery service with over 2,000 employees and registering nearly 40 million orders per month. The company today also operates in Mexico, Colombia and Argentina.

Although iFood is its most successful and identifiable company, Movile controls six other companies including Mensajeros Urbanos, Movile Pay, PlayKids, Sympla, Wavy and Zoop with products ranging from deliveries, to payments and financial services, to ticket purchase and mobile content and messages, to children’s content.

Last year the group’s companies increased the number of its employees by almost 30 percent, reaching almost 5,000 employees in Brazil alone, according to Matheus Fonseca, Movile’s HR manager.

The holding company is the only Brazilian group with two unicorns (privately held startups valued at over US$1 billion): iFood and Movile.

The conglomerate operates in several countries including the United States and several countries in South America and in Europe.

“We see an immense opportunity in the coming years to improve financial services and allow greater access for companies of all sizes. Specifically, there is enormous growth potential to meet the needs of small and medium-sized businesses. medium-sized companies, ” said Hruby in an interview last year.

Before becoming the CEO of the holding in March of 2020, Hruby spent seven years at Google and another seven at Facebook, where he served as vice president of sales for small and medium-sized companies to Latin America.

According to the executive, Movile today is investing in its own companies and looking into opportunities in the areas of education and health as well as continuing to invest in fintech companies.

“Our big bet for the coming years is the growth of fintech companies in Brazil,” concluded Hruby.

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