Year: 2020

Winner: XP Inc.

LatinFinance’s Initial Public Offering of The Year award goes to a financial disruptor that wanted to raise money to challenge the incumbents in one of the world’s most concentrated financial systems.

The market rewarded such boldness with demand that was more than 14 times over what the company was looking for.

After an aborted try in 2017, XP Investimentos decided in early 2019 to make an offer of $2.25 billion in Class A common shares on the Nasdaq stock exchange.

“It was a long period of hard work, and we had to set up a war room to finish the process still in 2019,” chief financial officer, Bruno Constantino told LatinFinance. “Our understanding was that, by then, we were ready to take a further step towards the transformation of Brazil’s capital markets.”

XP was born in 2001, when CEO Guilherme Benchimol started an investment advisory firm in a 25m2 office in the Southern City of Porto Alegre.

The goal was to provide individual investors with affordable access to capital markets. In less than two decades, XP has amassed more than 2.6 million active clients, served by a network of over 7,000 IFAs (independent financial advisers).

But, in 2019, it was relatively unknown outside of Brazil. Before the IPO, Benchimol and Constantino had to sweat to make their case to global investors, as they wanted to draw on their expertise in areas such as financial disruption and technology.

The eternal promise of Brazil helped to strengthen their case. Constantino estimates that the revenue pool in Brazil’s financial markets reaches BRL500 bln, and XP still has less than 2% of it. And that despite posting an annual 55% rate of revenue growth in the third quarter of 2020, reaching BRL2.25 bln. Assets under management increased by 61% to BRL563 bln.

During the final stretch of the listing process, the XP team made this case in a road show that was designed to last 9 days, but had to be squeezed into less than a week between New York, Chicago and San Francisco.

On December 11th, 2019, they rang the bell at Nasdaq, filling the trading room with shouts of “shis-peh, shis-peh”, the Portuguese pronunciation of XP. After the usual marathon of press interviews that followed the session, it was time to celebrate. Along with their families, both executives went to a NY restaurant to delight on… a fast food burger meal.

“We were exhausted,” Constantino said.

Since then, they have not had much time to rest. XP has been granted a bank licence and is launching new products in the market, such as collateralized credit, margin loans and services for SMEs (small and medium-sized enterprises). The company has just entered the competitive credit card market and is preparing to launch a digital banking unit.

It is not surprising then that, in December 2020, XP did a follow-on offer of shares to raise almost $1 bln for further investments.- LF


BANKS: Bank of America, Citi, Credit Suisse, Goldman Sachs, Itaú BBA, JPMorgan, Morgan Stanley, UBS, XP Investimentos

LAW FIRMS: Barbosa Mussnich & Aragao Advogados; Davis Polk & Wardwell; Lefosse Advogados; Maples and Calder; Mattos Filho; Skadden Arps Slate Meagher & Flom 

All supporting financial institutions and law firms were transmitted to LatinFinance by the award category winners. For updates please email