“Mergers and acquisitions without integration” sounds like trying to have your cake and eat it – to have the excitement of chasing and closing a deal without worrying about the consequences of trying to make it fit in with its new parent.
This formula, though, is the secret raising agent behind Movile’s cake becoming larger, with much of this success to the Brazil-based internet conglomerate’s chief financial officer, Arthur O’Keefe.
Fabricio Bloisi, chief executive at Movile, for O’Keefe’s GCV Rising Stars 2016 nomination said: “Movile’s growth and innovation strategy has bet highly on corporate venture to accelerate our entrance in new business, new markets and to experiment with technology innovations. Arthur is in charge of mergers and acquisitions in Movile.”
Movile is a Brazil-based mobile commerce provider covering food delivery, same-day delivery, ticketing, children’s education and logistics and has been backed by South Africa-based media and commerce company Naspers since 2008.
O’Keefe said he joined Movile four years ago to help start its strategic corporate venture capital and mergers and acquisitions programme. He said for his 2016 award: “We also work closely with the chief executives and chief financial officers of our invested companies in deals there.
“CVC is about reinvention. I love the idea of the phoenix rising from its own ashes and think of the CVC process in this manner. We take people, learning and capital from previously successful ventures and reinvest them into a new future through partnering entrepreneurs who have great ideas and want to accelerate the process.
“In this way, the role is filled with optimism and excitement as we create hypercharged companies by taking something already moving fast – a company – and accelerate it beyond what anyone thought was possible by adding great people, additional capital, proven processes and super aggressive strategy, particularly mergers and acquisitions.”
IFood, was Movile’s first CVC investment, and last August it raised another $30m from investors including UK-headquartered counterpart Just Eat as well as Movile. Founded in 2011, iFood at the time of the $30m round delivered some 1.7 million meals each month from around 10,000 partner restaurants compared with 1 million meals a year earlier.
The company will use the new funding to acquire Just Eat’s Brazilian subsidiary, Hellofood Brazil, and to purchase a 49% stake in SinDelantal, the market leader in Mexico.
O’Keefe last year added: “The learnings and data from this process [of iFood’s growth] were critical in the decision-making process to invest behind other great businesses such as PlayKids, Apontador, MapLink, Rapiddo and Cinepapaya in the segments of children’s education and entertainment, local services, logistics and ticketing.”
And Movile has also made its first exit in Cinepapaya, a Peru-based online movie ticket platform, which last month was acquired by Fandango, a peer in turn backed by media company NBCUniversal, which holds a majority stake, while entertainment group Warner Brothers holds a minority stake.
To keep its own growth going as well as help fund its subsidiaries, in June Naspers led a $40m series F round for Movile through its corporate venturing unit, Naspers Ventures. Earlier in the month, for example, Movile had entered the online ticketing sector with a $4m investment in Brazil-based ticketing and event management platform Sympla.
And in September, Movile has invested R$3m in Leiturinha, the Brazil-based operator of a children’s book subscription service, PlayKids.
Last year, O’Keefe summed the strategy up as “mergers and acquisitions without integration – it is a unique model in which we effectively work with the entrepreneur to create a joint venture between management and Movile to create a stronger business that continues to operate independently and retain its own incentive structure.
“It is a tremendous amount of work on the back end, but the results are supercharged companies that change the world in the segments in which they operate.”
O’Keefe is used to hard work and being able “to live in a constant state of disruption”.
His background helps with this level of discomfort. After graduating from the George Washington University with a degree in computer engineering, he began his career in the US Navy, where he served as lieutenant on USS Georgia and “ran an 18,000 ton submarine and operated a small nuclear reactor” for five years.
After leaving the navy in 2002, he undertook his MBA at Harvard Business School. Later, O’Keefe became a trader on Wall Street at what was then Credit Suisse First Boston. He moved to become a chief financial officer and chief operating officer in various investment companies in Brazil, India and the US, including shopping club Coquelux, before his move to Movile.