Gigatron seeks USD 3m-USD 5m to expand digital banking services, CEO says

Gigatron Franchising, a privately held Brazilian software developer and IT services provider, seeks to raise USD 3m-USD 5m to expand its digital banking solutions, CEO Marcelo Guimaraes said.

Birigui-based Gigatron, which develops software that helps retailers and other companies manage their point-ofsale operations, welcomes overtures from startup accelerators, family offices, venture capital firms, and investment funds, Guimaraes said. Financial suitors with mentoring skills would be a plus, he added.

The CEO plans to move to the US in up to two months to be closer to potential investors and expects to close the funding round by the end of the year, he said.

Gigatron plans to use the fresh funds to bolster its soon-to-be-spinoff unit Dotbank, a digital bank catering to micro and small-sized companies, especially retailers and service providers, Guimaraes said.

It will use the money for capex, staff hiring, customer acquisition, and to set up a credit rights investment fund (FIDC, in the Portuguese acronym) to expand the digital bank lending services, the CEO noted.

FIDC is a type of fixed-income investment widely used in Brazil’s credit markets. The majority of FIDCs come from loans to public and private pension beneficiaries.

Dotbank was launched in 2019 and operates 17 franchised units in eight of Brazil’s 26 states, Guimaraes said. Its portfolio includes ERP solutions, digital current accounts, secured loans, and the issuance of prefilled bank slips known as boleto bancarios, among other solutions, he added.

Gigatron decided to launch Dotbank after realizing that its clients generated more than BRL 1.5bn (USD 295.5m) in annual revenues but struggled to gain access to account receivable solutions and other financial services, the CEO noted.

According to the executive, Gigatron has 9,000 clients, of which 2,200 generate recurrent revenues. It serves clients in areas such as food and beverage, building materials, fashion, auto parts, agribusiness, healthcare, leisure, and others, Guimaraes said.

To help its clients overcome the logistics and social-distancing challenges imposed by COVID-19, Gigatron launched a series of initiatives including offering discounts to clients who have seen their revenues plummet and launching a digital platform to help them sell online through a “simplified virtual store” that can be created in a few minutes and does not require a domain or hosting for the brand's website, Guimaraes said.

Gigatron also launched a webpage with tips on how to increase sales through WhatsApp and social media platforms, as well as specific content on topics such as inbound marketing and digital sales channels, the executive added.

The company, which keeps its revenue figures private, has about 60 franchisees that act as licensed distributors by selling Gigatron’s software and providing training and maintaining services to customers. It reported a systemwide revenue of BRL 8m in 2018, Guimaraes told this news service in January 2019.

Guimaraes owns 90% of Gigatron and the remaining 10% is held by COO Victor Ruiz. The company was founded in 1997 and began franchising in 2012, the CEO said.

by Thiago Barrozo in Sao Paulo