Warburg Pincus has just announced that it has bought a relevant minority stake in Contabilizei — the accounting services platform for micro and small businesses.
The private equity firm invested $125 million in a 100% secondary transaction that provided a full exit to Kaszek, an investor in the company since 2015, and a partial exit to Point72 and Quona.
With this operation, Warburg Pincus becomes the largest individual shareholder of Contabilizei. The second largest is Softbank, which led a $320 million funding round in 2022.
“We have been interested in Contabilizei for over a year, but it is a company that does not need primary capital today, because it has already raised a lot and is very efficient,” Bruno Maimone, the Warburg Pincus manager responsible for the investment, told Brazil Journal. “That is why we found this angle of the secondary transaction.”
According to him, automation of accounting and taxes is a thesis in which the firm has invested before. Warburg Pincus invested in the American company Avalara in 2014 and stayed with the company until its IPO in 2018. The company — similar to Contabilizei — was acquired in 2022 at a valuation of $8.4 billion.
“In Brazil, this market is even more interesting because the tax complexities are enormous,” said the manager.
Contabilizei currently has 50,000 clients — from a market of more than 10 million companies that are required to do their accounting each year.
The startup does not have a major competitor, mainly competing with thousands of small regional accounting firms.
Bruno also mentioned that Contabilizei has built a very strong brand presence, which is essential in a market where trust is key in decision-making. “The entrepreneur is automating their accounting and tax records. If something goes wrong, it has serious implications. It must be done by someone they trust,” said Bruno.
He stated that this brand authority allows Contabilizei to acquire new customers at a very low cost, leveraging word of mouth.
Warburg Pincus’ investment comes at a time of strong growth for the startup, which projects revenues of R$ 300 million this year and has been growing at an average of 40% per year over the past five years.
Vitor Torres, the founder and CEO of Contabilizei, told Brazil Journal that the goal is to maintain this pace, with expansion coming from acquiring new customers and adding new products to the platform.
Contabilizei started with just an automation platform for accounting services, but over time added other functionalities. It now also offers a business bank account, a payroll management solution, and has created a brokerage for selling health plans and benefits like Total Pass.
The business account has already penetrated 70% of the customer base; the health plan, launched a year ago, 10%.
“We want to be a ‘one-stop solution’ for micro and small entrepreneurs,” said Vitor. “Large companies often prefer to have multiple suppliers, but micro and small businesses do not have the structure to manage multiple suppliers. They prefer to have a central contact that solves everything for them.”
Contabilizei was founded in 2013 by Vitor, who came up with the idea after opening another company and experiencing the difficulties of hiring an affordable accountant who provided quality service.
After changing suppliers four times, he decided to invest in technology to automate much of the processes, reducing the cost of the service.
Contabilizei can automate 99% of accounting, charging a subscription ranging from R$ 100 to R$ 350 from its customers.
Source
Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
