By Aluisio Alves
SAO PAULO (Reuters) – The insurance startup Thinkseg will debut on the US stock market at the beginning of the second half of this year through direct listing, in the first operation of a Brazilian company using the process known as DLP (direct listing).
The listing request has already been made to the Securities and Exchange Commission (SEC) and the transaction is expected to close by September, Thinkseg President Andre Gregori told Reuters.
Unlike initial public offerings (IPO), DLPs eliminate the need to hire banks to meet with investors and underwriters for the shares, which reduces transaction costs.
In the case of Thinkseg, investors will be able to reserve shares, each with a minimum price of US$500.
“We are providing the DLP for public offerings of up to $75 million,” Gregori told Reuters, adding that he understands the company does not yet have the size for an IPO.
According to Gregori, the funds to be raised with the offer 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.
To receive approval for a DLP, a company headquartered outside the US must open a subsidiary in the country, with no corporate relationship with the company in the market of origin.
Created in 2016, Thinkseg uses artificial intelligence to sell auto insurance. In 2018, it purchased the Bidu insurance and financial products platform. In 2019, it partnered with the Italian Generali to sell insurance by monthly subscription.
The DLP engine gained visibility after being chosen by giants such as Spotify, Robinhood and cryptocurrency broker Coinbase to list shares on the exchange. In Brazil, the matter has been discussed by the Brazilian Securities Commission (CVM) with market participants, before carrying out a possible regulation for this type of operation.
Another aspect that has been gaining strength in the US is the Special Purpose Acquisition Company (SPAC), a specific purpose acquisition vehicle, also called “blank check companies”. SPACs raised about $100 billion in the US in 2021, after moving 83 billion in 2020.
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