Growth investor Warburg Pincus has acquired a minority interest in Brazilian accounting firm Contabilizei for an investment of $125m.
Established in 2013, Contabilizei is engaged in automating accounting services tailored to small businesses and self-employed professionals.
The firm specialises in company formation and the Brazilian National Registry of Legal Entities (CNPJ) management. It delivers integrated solutions in one place for micro and small entrepreneurs along with self-employed professionals.
Contabilizei also offers advanced technology and the expertise of over 1,200 specialists across various fields to provide accounting services, free company formation, business checking accounts, and health and wellness benefits for entrepreneurs.
Currently, the accounting firm caters to over 50,000 clients. It has generated total revenue of more than BRL300m ($53.46m).
According to Contabilizei, its growth has been driven by its unique approach to automating 99% of its accounting processes, which include tax calculations, payments, and the fulfilment of tax obligations for micro and small businesses.
The company has also expanded its offerings to include health plans, creating a comprehensive suite of services for micro and small business owners.
Contabilizei CEO and founder Vitor Torres said: “Our focus is to increasingly meet the needs of small business owners through a seamless journey on our platform, empowering them with better management, efficiency, and financial health.
“We are working hard to ensure Contabilizei continues its high growth rate in the coming years and maintains its delivery of high-quality, trustworthy services to help small business owners succeed.”
Through the investment, Warburg Pincus becomes the largest shareholder in Contabilizei, acquiring stakes from venture capital funds that first backed the company in 2014, including Kaszek.
Warburg Pincus now holds stakes in 11 Brazilian companies, including eight in the technology sector. The firm’s backing is expected to accelerate the next phase of growth for the accounting technology services company.
Warburg Pincus managing director Bruno Maimone said: “We see great potential in the company, especially in a market still dominated by manual processes, with ample room for automation and the use of artificial intelligence.
“Additionally, there is significant room for further monetisation through the expansion of financial services offered on the platform.
“The investment in the company is also aligned with our global strategy, as we have a long history of investing in companies in the tax automation space in the United States, such as Avalara and Chipsoft.” In July this year, banking software and technology solutions provider Matera secured an investment of $100m from Warburg Pincus.
