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Brazil’s Oria Capital Seeks $100 Million for Latest Fund Added in 9/26/2018
Brazil’s Oria Capital is seeking $100 million for its third fund, as the private-equity firm plans to capitalize on the growth of the technology market in the country, according to people familiar with the matter.

Brazilian investors have shown interest in investing about $20 million in Oria Tech III, the
people said. Those investors include family offices and fund-of-funds manager Spectra
Investments, which likely will invest up to 50 million Brazilian reais ($12.4 million), one of the
people said.

The São Paulo firm this week launched fundraising efforts in the U.S., where it plans to raise a significant portion of the remaining $80 million, with a smaller portion coming from European investors, one of the people said.

Artha Partners Ltd., a placement agent focused on emerging markets, is helping Oria raise the fund, two of the people said.

The firm made its first exit in 2015, when it sold e-commerce services provider Chaordic Systems SA to publicly traded Linx SA . The deal, which generated a 60% internal rate of return and an 11-times multiple of invested capital, gave the firm more confidence to expand its investor base outside of Brazil, one of the people said.

Oria originally was the private-equity arm of asset manager DLM Invista, from which it spun off in 2015 under the name DLM Private Equity, one of the people said. The firm rebranded as Oria in 2016. It has six partners today, including co-founders Paulo Caputo and Jorge Steffens.

The firm’s first fund closed on BRL170 million in 2012, before the firm spun off from DLM, one of the people said. In 2018, Oria raised BRL71 million for a second pool of capital, which was used to acquire the portfolio of Intel Capital in Brazil. Both funds are fully invested.

Oria focuses on technology-based companies operating in the business-to-business services sector, particularly providers of software-as-a-service products. The firm typically invests $10 million to $20 million per deal in companies beyond the startup stage that have the potential to expand further, two of the people said. Those companies, which have annual revenue from BRL15 million to BRL150 million, must have a tested product, a tested market and be generating positive cash flow, they added.

There has been a high level of deal activity in Brazil in the technology and information sector during the last few years, with BRL3.65 billion invested in the space from 2013 to 2017 across 147 transactions, the largest number of deals among all sectors by far, according to data from the Brazilian Association of Private Equity and Venture Capital and accounting firm KPMG LLP.

Oria counts 14 companies in its portfolio today. They include cybersecurity company Cipher Security LLC; Zenvia Mobile, a provider of software for facilitating mobile communication between businesses and customers; and digital banking technology provider Technisys.

Source: WSJ


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