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Insurtech Thinkseg will be the first Brazilian company to make a DLP in the United States

Unlike IPOs, the direct listing process (DLPs) eliminates the need to hire banks and underwriters, which reduces transaction costs

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  • To make a DLP, a company headquartered outside the U.S. must open a subsidiary in the country;
  • The DLP gained visibility after being chosen by giants such as Spotify, Robinhood and cryptocurrency broker Coinbase to list shares;
  • In the case of Thinkseg, investors will be able to reserve quotas, each with a minimum price of US$500.

Brazilian insurance startup Thinkseg will debut on the U.S. stock market through a direct listing process (DLP) in the second half of this year. It will be the first Brazilian company to go public through this mechanism.

Unlike initial public offerings (IPO), DLP eliminates the need to hire banks to coordinate the offering and underwriters for the shares, which reduces transaction costs. To make a DLP, a company headquartered outside the U.S. must open a subsidiary in the country.

READ ALSO: SPAC hunt begins for startups that want to go public in Latin America

In the case of Thinkseg, investors will be able to reserve quotas, each with a minimum price of US$500. “We are providing the DLP for public offerings of up to US$75 million,” said Andre Gregori, Thinkseg’s CEO. He added that the company does not yet have the size for an IPO.

According to Gregori, the funds to be raised will be invested in another company, with its own financial and legal structure, completely separate from Thinkseg, which is preparing to start operations in the United States and Mexico.

Created in 2016, Thinkseg uses artificial intelligence to sell auto insurance. In 2019, it partnered with the Italian Generali to sell insurance by monthly subscription.

READ ALSO: Brazilian shared housing startup Yuca raises a BRL 56 million Series A

The DLP gained visibility after being chosen by giants such as Spotify, Robinhood and cryptocurrency broker Coinbase to list shares. In Brazil, the Brazilian Securities Commission (CVM) is in talks with market players about a possible regulation for this type of operation.

The Special Purpose Acquisition Company (SPAC), also called “blank check companies”, has also become popular in the United States. SPACs raised about $100 billion in the US in 2021, after $83 billion in 2020.

Translated by LABS

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