Bionexo, a health tech company based in Latin America, is planning to go public in an initial public offering (IPO) that could value the company at more than R$1 billion. The IPO will be the first of its kind in Latin America, and Bionexo intends to raise BRL 500 million in a primary offering and at least BRL 300 million in a secondary offering to ensure the minimum liquidity of the stock. The IPO will be led by Itaú BBA, with the participation of BTG Pactual, UBS BB, and Bank of America as coordinators.
Bionexo’s software connects hospitals and clinics with medical supply providers, and the company’s solutions currently serve 2,200 buyers and 30,000 suppliers of medical supplies. Hospitals and clinics pay a monthly subscription fee to use Bionexo’s software, which digitizes the procurement process and reduces costs, and 99% of the company’s revenue is recurring.
Bionexo’s investment thesis is based on three pillars: continuous digitalization of the health sector, greater monetization of current customers through upselling and cross-selling strategies and the creation of financial services, and growth through mergers and acquisitions that bring complementary solutions to its portfolio, increasing cross-selling.
Last year, Bionexo had a GMV of R$11.7 billion, a revenue of R$90 million, and a gross margin of 63.9%. The company’s annual recurring revenue (ARR) was R$114 million in December. Bionexo has grown revenue, GMV, and ARR at compound rates of 15.8%, 15.6%, and 21.4%, respectively, over the last three years. The company is seeking a valuation of 8x to 10x estimated revenue for 2021, which is in line with the multiple leading global “software as a service” (SaaS) companies.
Bionexo’s largest shareholder is Prisma Capital, an alternative asset manager, with 41.6% of the company’s capital. The sovereign fund Temasek, which invested in Bionexo in 2018, has a 31% stake, and Mauricio de Lazzari Barbosa, the company’s founder, still owns 26.3% of the capital.
Bionexo had a net retention rate of 146% in 2020, indicating that customers who bought BRL 100,000 in the company’s solutions in 2019 started to buy BRL 146,000 a year later. The company’s lifetime value/customer acquisition cost (LTV/CAC) ratio is 6.3x, which is equivalent to that of the best SaaS companies, according to an annual study by Bessemer Venture Partners.