SoftBank-Backed Crypto Brokerage in Brazil Raises $50 Million
(Bloomberg) --
2TM Participacoes SA, owner of the biggest Brazil-based cryptocurrency brokerage, raised $50 million as it hunts for acquisitions to expand into additional Latin American markets.
The company, backed by SoftBank Group Corp., received investments from 10T Holdings, a U.S. private equity firm focused on digital firms, and Tribe Capital, a San Francisco-based venture capital fund. Also participating are the Brazilian venture capital company PIPO Capital Gestao de Investimentos Ltda., the Sao Paulo-based firm TC Traders Club SA and Endeavor Brasil.
The proceeds will be used for new products and growth, including expanding into Chile, Colombia, Mexico and Argentina, according to 2TM co-founder Gustavo Chamati.
“After a torturous path trying to explain a technology as disruptive as blockchain, we are now able to convince Brazilian investors about its possibilities and also venture capitalists about the potential of Latin American markets,” Chamati, 40, said in an interview.
The $50 million is part of a second round of investments that started with a $200 million capitalization from the SoftBank Latin America Fund announced in July, which valued the company at $2.15 billion and created the second crypto unicorn in Latin America.
2TM received its first round of capital in January from GP Investments and Parallax Ventures, with the participation of HS Investimentos, Gear Ventures, Evora Fund and Genial Investimentos. It didn't disclose how much it received.
Chamati created Mercado Bitcoin SA -- the first cryptocurrency brokerage firm in Brazil and 2TM's crown jewel -- in 2013, along with his brother Mauricio. He first learned about Bitcoin in 2011 from a program on MTV, and then started to read more about it.
“I got interested, started to talk to people and understood how deep a transformation it could bring to the financial markets,” he said.
After he and his brother spent years putting their own money into the firm, activity picked up this year, when Mercado Bitcoin reached 3 million clients and traded more than 40 billion reais ($7.1 billion). That was more than all previous years combined.
2TM has already purchased several companies in Brazil and increased its headcount to 700 this year from 200. Its Mercado Bitcoin issued the first token of government debt and issued Futecoin, an investment in which gains come from fees Brazilian teams Vasco and Santos receive when a soccer player they trained moves to a new team, as would be the case should Neymar be sold by Paris Saint-Germain to another team.
The firm's goal is to become a provider of blockchain infrastructure for financial markets in Latin America, including services such as custodian and fund management, Chief Executive Officer Roberto Dagnoni said.
“We are very happy to bring to our firm specialized investors such as Tribe Capital and 10T Holdings,” Dagnoni said, adding that the idea is to get another round of private investment before considering going public.
Demand for the company's services varies from nation to nation, Dagnoni said earlier this month. In Mexico, for example, there is a lot of interest in remittance services, while in Argentina the peso's volatility means stablecoins backed by the dollar are in high demand.
©2021 Bloomberg L.P.
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