Bamboo: Providing Broad Access to Brazil Private Debt Markets

By Pedro Arbex [1]

Edited Translation for grammar and clarity by Arthur O’Keefe

Investment banks today operate largely with traditional companies addressing a significant market in more or less the same way for decades.

For former Movile CFO Arthur O'Keefe , this is fertile ground for innovation and disruption

“It’s all analog!” Arthur told the Brazil Journal . “From customer capture and deck construction to investor contact and distribution, it has no technology at all.”

With this diagnosis, Arthur joined Felipe Moraes , former Managing Partner of Innova Capital, to found Bamboo DCM , a startup that expands the Capital Markets in Brazil beyond what is currently served by Banks.

“We are not attacking their business, we are attacking the market that is not being served by them,” Felipe said. “If we include more companies in this market and give access to foreign investors, we will already have enormous potential.”

To kick-start, Bamboo has just raised a seed round led by Global Founders Capital (led by Alex Anton and Fabricio Pettená ). The $4 million round also saw participation from Atman Capital (led by Pedro Sorrentino and Pedro H. Dias ), Latitud (led by Tomas Roggio and Brian Requarth ), and prominent angel investors such as Marcelo Martins (Cosan), Jonathan Green , Dan Faccio , Ron Rymon , Andre Beisert , Felipe Serson Zullino , Andrew Ho .?

Bamboo’s initial efforts are directed to Debt Capital Markets (DCM) — which makes the structuring and distribution of debt securities to companies. In addition to connecting issuers to investors, Bamboo’s platform also provides data about the issuer, allowing investors to monitor companies.

Bamboo’s Platform allows investors to receive and digest company data, organize on-demand roadshows, and use data engineering to rapidly find the most suitable and highest caliber private credit opportunities in a single place, making the entire investment process more efficient, transparent, and credible. With digital origination and distribution and a proprietary asset monitoring technology that radically lowers the frictions of building and maintaining relationships between investors and companies, Bamboo expands access to the private debt markets bringing 10x more investors than traditional investment banks at deal sizes up to 10x smaller.[2]

Bamboo is currently finalizing its first issue, a debenture for a distributed solar generation company, and is overseeing the entire process from the structuring and issuance of debt to the distribution and monitoring of the asset while earning deal structuring and data monitoring fees.

“In this case, we made the debt issuance based on the number of installations of the solar panels in the residences. Then the investor will be able to monitor on our platform the company’s facilities and the performance of these customers,” said Arthur. “If there is any deviation from what was promised in the offer, the investor will be able to quickly identify any issues and work the company to try to resolve the problem.”

Bamboo’s focus is on middle market companies, which need to raise between R$ 10 million and R$ 100 million (US $2 million – $20 million) and which, ideally, are data-centric.

“Companies raising these amounts are not well served by the market,” Felipe said. “The banks don’t deal with these size deals because they’re very small tickets for the work they’re going to have” given their primarily analog origination and distribution methods.

Felipe also added that the monitoring part of these assets is a product in itself.

“Nobody does this. There are companies that have so much data that you can’t put in Excel. Our ability to do data engineering and turn these companies’ data into information that helps investors make decisions is a huge differentiator,” he said.

Bamboo can do all the steps of transactions or provide a la carte services, as appropriate.

“A transaction structured by another bank or institution can be easily distributed over our platform,” Arthur said. “To have access to the data we have to be involved in the issuance, at least, but we don’t necessarily have to do the structuring.”

After starting in the debt market, Bamboo’s idea is to gradually expand into other capital markets areas as the startup earns the trust of investors and issuers.

Additional credit - Bamboo Founding Team Members: Rodrigo Ciganda , Igor Donni , Murilo Barreto , Kaue Kzan Teixeira , Edson de Paula , Wermans Barros , Bruno Moreira , Isabeli Fernandes

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[1] Edited translation of article of January 13, 2023 by Pedro Arbex, The Brazil Journal – original (Portuguese)

[2] Clarifying paragraph added is not part of original Portuguese article