Goldman Joins SoftBank in Backing Brazilian Retail Startup
(Bloomberg) -- Goldman Sachs Group Inc. is adding another firm to the growing list of startups it backs in Latin America.
The Wall Street powerhouse and Redpoint eventures are investing $23 million in Brazil’s Olist Servicos Digitais, a startup that helps small merchants sell online, according to Tiago Dalvi, the firm’s founder and chief executive officer. He declined to provide valuation figures.
“Goldman’s support is an important validation to our strategy,“ Dalvi said in an interview. “It helps with overseas expansion and M&A.“
Olist, based in Curitiba, Brazil, has a similar model to Shopify Inc and has raised $135 million since inception, with backers including SoftBank Group Corp. and retail billionaire Abilio Diniz’s family office. Last November, the firm got $57 million in its Series D round, led by SoftBank. Goldman’s recent investment is a delayed portion of the same round, Dalvi said.
Dalvi expects at least one more private fundraising before taking Olist public.
Olist is the latest example of how Goldman is looking to profit out of Latin America’s blooming startup industry. Its asset management division, which handled the Olist transaction, also owns stakes in payments fintech Iugu Servicos na Internet SA and cancer-treatment provider Oncoclinicas do Brasil Servicos Medicos. Other units of the U.S. bank have invested in Brazilian fintech Open Co and helped fund digital bank Nubank’s venture in Mexico.
At Olist, Goldman is set to benefit from the pandemic-fueled windfall for e-commerce. The firm has over 25,000 small merchants connected to its Olist store, which sells through marketplaces including platforms run by Amazon.com Inc. and MercadoLibre Inc., Dalvi said.
“We doubled our revenues last year and plan on multiplying sales by at least 2.5 times this year,” Dalvi says.
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Olist is speeding up its hunt for acquisitions, with 20 targets in the pipeline and five in advanced talks. Last December, Olist bought logistics startup PAX, with plans to open new cross-docking hubs in different Brazilian cities this year. It’s also hiring, with plans to grow its workforce to 1,000 from 650 employees by the end of the year.
The startup “definitely wasn’t a case of overnight success,” its 35-year-old founder said. Olist was created in 2015, born out of another firm Dalvi had created more than a decade before, which sold different types of handmade products online and through brick-and-mortar retailers. That business never really took off, plagued by high taxes and logistical challenges.
“It did give me first-hand experience on what being a merchant is like,” Dalvi said. “I remember driving to pick up products, then packaging and shipping them by myself.”
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