Brazil‘s broker XP announced an undisclosed investment in Virgo, a capital market infrastructure tech company. The funds will be invested in the team expansion and development of new products, accelerating Virgo’s strategy to consolidate itself as a major hub of high yield and alternative products for institutional investors.
Virgo’s marketplace, which connects borrowers to investors in order to reduce costs and simplify the fundraising process, is expected to have operating capabilities across different debt and equity instruments, in addition to a proprietary monitoring system and access to real-time information, allowing for greater transparency.
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“We want to offer multiple products, maintaining our purpose of no spreads. With regards to the monitoring and access to real-time information system, we aim to provide greater transparency to capital markets, allowing forecasting of appreciation or deterioration of credit and projects, and a more liquid secondary market for all products offered by Virgo,” said Daniel Magalhães, Virgo’s CEO and head of digital transformation.
Virgo currently has more than 105 institutional investors willing to provide capital to mid-sized companies and businesses. According to the company, it can raise up to BRL 50 million in less than 12 hours.
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Virgo Securitization Company, the company’s securitization platform is also expected to benefit from the investment. Currently, the platform is the largest agricultural and real estate securitization company in Brazil, with a monitored portfolio of over BRL 35 billion.
XP bets that with this investment it will be able to expand the access to capital markets by small and medium companies. According to Pedro Mesquita, head of Investment Banking at XP, there is already a very strong movement of mergers and acquisitions, debt and share issues involving companies of different sizes. “With this deal, we expect to accelerate this movement”, he said.