Brazil’s PagSeguro raises US$2.7B in IPO

In a story originally brought to our attention by Reuters and SeekingAlpha, Brazilian payments system PagSeguro had the fifth-best first day for a billion dollar IPO in the past decade. PagSeguro provides simple payment processing solutions to small- and micro-enterprises, similar to the dongles produced by Square in the United States.

Compared with Square’s mobile-adapted dongles, PagSeguro’s payment processors are autonomous and connect via cell or WiFi networks. PagSeguro has secured strong and consistent growth by selling its payment systems to merchants rather than lending them, beating out competitors like Cielo and Redecard.

Their IPO, which priced shares at US$21.50 and raised US$2.7B, jumped 36% on its first day, putting PagSeguro just behind Snapchat in the rankings.

With low competition in the market, PagSeguro spread as merchants saw sales soar; the technology now has a solid consumer base and increased sales by 133% in the last quarter.

PagSeguro’s IPO was the biggest issue by a Brazilian company since Banco do Brasil listed its insurance unit in April 2013. This strong debut is seen as a sign that Brazil’s economy is on the mend and PagSeguro is betting that Brazilians will increase personal spending over the next year as the economy improves.

Read more about PagSeguro:

Reuters coverage

Investor’s Business Daily coverage

SeekingAlpha coverage