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Capital Markets

dLocal sells a broader EM story

Payments company prices above range as it shrugs off regional valuation constraints on Nasdaq debut.

A view of the exterior of the Nasdaq market site in Times Square after the Nasdaq breached the 6,000 mark for the first time ever on Tuesday, in New York City
Source: Shannon Stapleton/REUTERS

Latin American fintechs will take encouragement from the successful Nasdaq listing of Uruguay-based payments fintech dLocal on June 3.

The IPO, which priced at $21 a share – well above the deal’s range of $16 to $18 – and popped a further 55% in trading to close at more than $32, was proof that the ‘Latin American discount’ that is typically applied to valuations of fintechs in the region can be overcome.

“I really struggled with the Latin American discount when I was an investment banker,” says dLocal’s COO, Sumita Pandit, who before joining the fintech in April this year had been global head of fintech investment banking for JPMorgan in New York.

“When we first started testing valuations with investors the assumption was the nearest comparisons were the Brazilian companies like Stone and PagSeguro,” Pandit, now based in San Francisco, told Euromoney shortly after the transaction priced.

Going public gives us acquisition currency – not so much to buy companies but to acquire people
Sumita Pandit, dLocal
Sumita Pandit, dLocal_400x400.jpg

As most listed fintechs in Latin America have been Brazilian companies – with exceptions such as Argentina’s Mercado Libre – this made sense, but Pandit and her team spent a lot of time convincing investors that dLocal was a broader EM story.

“We

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