Ant Financial, the financial services affiliate of e-commerce group Alibaba, has agreed to invest $100m in Brazil-based financial technology provider Stone Co alongside an initial public offering that could reach $1.1bn.
StoneCo has set a range of $21 to $23 and will issue 45.8 million class A common shares on the Nasdaq Global Select Market while its investors will divest a further 1.9 million shares.
Ant Financial will provide the extra funding in the form of a private placement, according to a securities filing on Monday.
Founded in 2012, StoneCo provides cloud-based technology that enables merchants to accept electronic payments. It has more than 200,000 active clients spanning online and brick-and-mortar retailers.
The company almost doubled its revenue year on year to $165m in the first half of 2018 while turning a R$75.9m loss into a R$87.7m ($22.7m) profit over the same period.
StoneCo has not disclosed details of past funding, but investment vehicle HR Holdings is its largest shareholder, with no class A shares but 55.4% of the company’s class B shares, which are set to be reduced to 55.3% according to the filing.
Madrone Partners has 6.2 million class A shares (9.3%) and 20.4 million class B’s (12.7%); Actis has 20.2 million class A’s (30.5%) and 1.7 million class B’s (1%); T. Rowe Price has 14.5 million class A’s (21.8%) and 3.05 million class B’s (1.9%); and Tiger Global Management has almost 33,000 class A’s and 11.4 million class B’s (7.1%).
HR is selling 970,000 shares for up to $22.3m while Actis and Tiger Global are selling smaller batches of shares, as are several of the company’s minor shareholders.
Berkshire Hathaway has expressed interest in buying up to 14.17 million shares in the offering, equating to up to $326m if StoneCo floats at the top of its range. Other prospective buyers include T. Rowe Price, which could purchase up to $220m, and Madrone (up to $55m).
Goldman Sachs, JP Morgan Securities, Citigroup Global Markets, Itau BBA USA Securities, Credit Suisse Securities (USA), Morgan Stanley, Merrill Lynch, Pierce, Fenner & Smith and Banco BTG Pactual are the underwriters for the offering.
