Business

Brazilian brokerage Warren raises BRL 300 million and plans to double its operation

Series C was led by GIC, Singapore's sovereign wealth fund that has already invested in Nubank and Hotmart

Warren 300 million round
Warren's founders: Marcelo Maisonnave, Tito Gusmão, Kelly Gusmão,Rodrigo Grundig and André Gusmão. Photo: Warren/Courtesy
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  • The funding round also includes the participation of the Ribbit, Chromo Invest, Kaszek, QED, Meli Fund and Quartz;
  • The Series C takes place less than a year after a BRL 120 million round in July last year;
  • The fresh capital will be used to expand the team and the Warren for Business platform, Warren’s arm geared towards the financial market professionals.

Brazilian investment startup Warren has just announced a BRL 300 million round from a pool led by GIC, Singapore’s sovereign fund that has already invested in Brazilian unicorns like Nubank and Hotmart. The funding round also includes the participation of the Ribbit, Chromo Invest, Kaszek, QED, Meli Fund and Quartz. The Series C takes place less than a year after a BRL 120 million round in July last year.

With the round, GIC wins a seat on Warren’s board. Founded in 2017, the startup is a broker and asset manager with BRL 6 billion in assets under management and 200,000 customers (a 1000% growth since April last year, when the company had BRL 600 million under management), as Tito Gusmão, Warren’s CEO, told LABS.

Now, the goal is to double the volume of assets and reach 300.000 customers by the end of 2021.

READ ALSO: Amid the crisis, Brazilian investment startup Warren almost doubled its team size and received BRL 120 million

According to the company, the fresh capital will be used to expand the team – from 400 to 600 employees -, to marketing and expansion of the Warren for Business platform, Warren’s arm geared towards the financial market professionals. Acquisitions are also in the plans.

This is the third funding round that Warren has received since its beginning. In 2019, it raised BRL 25 million in a Series A round led by venture capital fund Ribbit and, in 2020, raised BRL 120 million in a Series B led by QED Investors.

READ ALSO: Founded by Brazilians, startup Brex raises a $425 million round

Warren has among its founders ex-XPs and has implemented a business model that charges customers a fixed fee for total portfolio management. This, according to the company, eliminated the conflict of interest inherent in the traditional investment business model, which charges a commission for investment products.

“We want to bring autonomous agents to the right side of the force. The vast majority of self-employed agents are great professionals, but the self-employed model is a conflicted model in which the commission is embedded in the product and invariably he will offer a product which commission is higher for whomever he is selling it to. We argue that this autonomous agent who does the right job is a like a Ferrari driver driving a bar car,” said Gusmão.

We are not reinventing the wheel, in the USA it is exactly like that, ⅔ of the brokerage industry is on top of this professional aligned with the client.

TITO GUSMÃO, CEO OF WARREN


Warren operates on B2B and B2C models with a platform for partners like XP and BTG already do in Brazil, but its partners are investment advisors that operate with the CVM (Brazil’s Securities and Exchange Commission), and not the autonomous agent.

According to Gusmão, besides XP and BTG brokers, Warren’s main competitors are traditional banks. “90% of Brazilians’ money is in five banks and 90% of Americans’ money is in brokerages,” he says.

In Brazil, there are two licenses to distribute investments. The agent can take Ancord‘s test as an autonomous investment agent and plug-in XP, BTG, or Safra platforms, or he can take the Brazil’s Securities and Exchange Commission investment consultant’s test. “These are different exams with different remuneration models,” explains Gusmão. “In England, the securities regulator ended the autonomous agent, now it has to be 100% fiduciary, with no commission embedded in the products. That’s how we see the future.”

Warren does not disclose valuation, but, according to Gusmão, the IPO is in the company’s dream for three to four years. “Let’s take it one step at a time.”

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