Leandro Miranda, chief executive of Archx Capital, says the investment banking firm is eyeing an equity raise in the second half of the year as it continues to build momentum.
Miranda, speaking to Euromoney in his company’s smart new office with views across São Paulo’s Marginal Pinheiros, declined, however, to confirm the valuation that he would be looking to achieve through this funding round.
Archx certainly has a momentum story to sell to potential investors. The firm recently received authorization from Brazil’s securities regulator to sell and distribute the public issuance of securities in the primary and secondary markets. Just 10 months old, it already has a pipeline of 18 such deals worth a combined value of some R$5.5 billion ($980 million), according to Miranda.
The company has been successful in targeting corporate clients with revenues between R$200 million and R$1 billion. Miranda argues that many of these firms have always been too small to be serviced properly by the investment banking divisions of Brazil’s universal banks, while even commercial bank interactions are dominated by off-the-shelf offers.
Meanwhile, banks have been cutting credit to corporates throughout the country: debt lines have shrunk as banks perceive greater risk of default and large-scale insolvencies such as that of Lojas Americanas push credit committees into risk-off mode when it comes to new credit or renewing some facilities.
