• Sat. Dec 2nd, 2023

How VC Headline Acquired 30% Stake in Brazil’s Largest Startup Acquisition in 5 Years

How VC Headline Acquired 30% Stake in Brazil’s Largest Startup Acquisition in 5 Years

When Headline partner Romero Rodríguez got inbound for Brazil-based payment processing startup Pismo São Paulo in 2016, it was a good time. Rodriguez was mapping out the payments sector—looking for a company that would try to solve some of the infrastructure problems in that sector.

Rodriguez says in a subsequent meeting good luck The team was an easy sell: engineer Daniela Binati—who fervently believed the fast-paced products at the new banks would threaten incumbents, Rodriguez says—convinced her former boss, Ricardo Josua, to put her retirement plans on hold and build a company that would help keep these banks afloat. Later, Binati’s husband Marcelo Paris and sister Juliana Binati will board the ship.

That inbound will become the diamond in Headline’s Latin American portfolio. Late last month, Visa announced plans to acquire Pismo for $1 billion—pending regulatory approvals in what would be the biggest M&A deal for a Brazilian startup since Didi Chuxing acquired rideshare company 99 five years ago. According to Rodriguez, Pismo’s valuation nearly doubled from $410 million in a 2021 Series B round. That’s when SoftBank, Accel and other investors came in on the term sheet. At the time the acquisition was announced, Pismo had scaled to 80 million accounts and processed $40 billion in transaction volumes annually, and had signed a commercial agreement with Citibank.

For its part, Headline had raised a 30% stake in the company in three funding rounds at the time of the Visa deal. Do the math, once the deal closes, it will equate to roughly $300 million in exits across multiple Headline funds, including one of its regionally focused funds, Headline Brazil.

The deal is another confidence boost for Rodriguez, a former Brazilian founder who made a name for himself after selling BuscaPé, the price comparison website he started in 1998, for $374 million in 2009. At the time, it was one of Brazil’s biggest exits. Founders started taking him out for coffee or asking for advice—eventually leading him to start angel investing and, after about 30 investments, to take a hand in the venture as a partner at Headline.

Now, Pismo is raising the bar for what’s possible within Latin America’s tech ecosystem—funding figures have dried up.

Before the second quarter, when the Pismo deal was announced, there had been no acquisitions worth more than $100 million in Latin America this year, according to Crunchbase data. Early stage and growth stage deals are a big hit. The number of deals at the end of the first quarter was down 71% from last year.

All of this is familiar to Rodriguez, who describes the post-dot-com period from 2001-2009 as the “nuclear winter” for Latham. The exits dried up, and so did the funding. “Everybody who wanted to start a company back then was bootstrapping—there was no other way,” Rodriguez says.

The market finally recovered around 2010, Rodriguez says—especially when growth-stage funds like SoftBank or Tiger Global jumped in and wrote big checks, he says. According to Crunchbase, the same firms have recently pulled back from check-writing in the sector.

“(It’s) not going to be easy to raise,” Rodriguez says, later noting that “eventually we might see some of these big companies… fail.” So far, growth stage companies have adopted business models or have cash in their bank accounts to survive. But early-stage valuations are “half of what they were a year or two ago” and “there are fewer active funds with new money to invest in companies,” he says.

The headline says the founders are still trying to get funding: The firm’s Brazilian fund received nearly 2,500 pitch decks in the past 10 months—partners are still on the hunt for new deals, as well as increasing investment in existing portcos.

“We have at least three companies in the portfolio that we are currently in conversation with (about new rounds),” Rodriguez says.

Sequoia lays off a third of its work force…On Friday, Sequoia laid off seven members of its talent team—a third focused on helping its portfolio companies recruit, a Forbes report said yesterday. Sequoia COO Sumaiya Balbale told Forbes that the layoff program was unrelated to the five investors who left the firm in recent months.

Benchmark #6…Benchmark announced yesterday that it has added a new general partner, appointing Victor Lazarte, the former CEO of Brazilian gaming startup Wildlife Studios, as its newest GP. With Lazart part of Benchmark’s small, elite team, the venture firm now has six GPs—all of whom share an equal cut of the firm’s profits.

In other news…In a blog post this morning, Andreessen Horowitz said it has named Anjani Midha, Discord’s vice president of platform ecosystem, as a general partner to oversee its AI efforts. Midha, who founded Discord’s first developer platform organization and launched its partnership with Midjourney, is an angel investor in AI companies including Anthropic, Eleven Labs and Infinites AI.

see you tomorrow,

Jessica Matthews
Twitter: @JessicaMatthews
Email: jessica.mathews@fortune.com
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Jackson Fordys Curated deals section of today’s newsletter.

Venture deals

StructurelessA Sacramento, Calif.-based LLM data preprocessing solutions provider has raised $20 million in Series A funding. Madrona Round led and joined Bain Capital Ventures, M12 Ventures, Mango capital, MongoDB Ventures, SHIELD CAPITALOther angels.

UpliftA Tampa Bay, Fla. based behavioral health company has raised $10.7 million in Series A funding. Ballast Point Ventures Round led and joined Kapor is the capital, Front Porch VenturesAnd B capital.

TestSeattle-based property inspection platform raises $5.76 million in led funding Fundraising.

Private equity

Rhythm Capital Agreed to take over Shilpi Capital Management, a New York-based asset manager. The deal is valued at approximately $639 million.

Ardian Agreed to take over Atero, a Willp waste management and circular economy platform based in the Netherlands. Financial terms were not disclosed.

Lone View Capital owns majority shares in Smartlinx, an Iselin, NJ-based workforce management solutions provider. Financial terms were not disclosed.


Public procurement Agreed to take over Simple self-storage$2.2 billion from Blackstone, an Orlando-based storage company.

Bristol Myers Squibb Agreed to invest $35 million EmeticsA Houston, Texas- and Tübingen, Germany-based clinical-stage biopharmaceutical company.


Busy for youThe China-based snack shop chain is considering an initial public offering that could raise $100 million to $200 million, according to Bloomberg.

Funds + funds of funds

TitletownTechA Green Bay, Wis. -based venture capital firm has raised $70 million for a fund focused on early-stage companies in the Midwest.


TitleHired by a San Francisco-based venture capital firm Kamran Ansari As an entrepreneurial partner. He used to be with him Greycroft.

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