Brazilian digital bank PicPay eyes Nasdaq IPO in 2025

By Luciana Magalhaes and Paula Arend Laier

SAO PAULO (Reuters) - Brazilian digital bank PicPay will start hiring financial firms to carry out a planned initial primary offering in New York next year, two people familiar with the matter told Reuters.

It will be the second time PicPay, owned by the holding group J&F, which also controls meatpacker JBS, aims to list shares in the U.S. In 2021, the group made preparations for a Nasdaq IPO, but it dropped that plan due to market headwinds.

PicPay has not formally picked any investment banks for the consortium, but it intends to hire Citigroup among others, as the bank has been involved in its IPO talks since 2021, said the sources, who requested anonymity to discuss confidential talks.

PicPay and Citigroup declined to comment on the matter.

As before, Picpay aims to list its shares with Nasdaq, which for years has attracted tech sector IPOs with lower fees and easier listing requirements.

PicPay has not settled on the size of the share sale, but wants its IPO to be "only as big as necessary," according to one of the people, who also cautioned that the timing and value may vary with market conditions.

The fintech sees 2025 as a promising year for a New York IPO in as the Federal Reserve has already began cutting rates and the U.S. election will soon be in the rearview mirror.

More than raising fresh capital, the IPO is designed to offer PicPay international visibility and access to a larger pool of tech investors, the sources said. Funds raised from a share sale would help to expand operations in Brazil, they said.

Headquartered in São Paulo, the firm was founded in 2012 and acquired three years later by J&F, which also owns companies ranging from wood pulp producers to energy firms and consumer goods makers.

PicPay has grown fast in recent years as Brazil's central bank has encouraged more competition in retail banking with new technologies making it easier for challenger banks.

At the end of the second quarter, Picpay said its net income for the first half of 2024 totaled 61.8 million reais ($11.3 million), nearly twice its net income in all of 2023.

($1 = 5.46 reais)

(Reporting by Luciana Magalhaes by Paula Laier; Editing by Brad Haynes and David Gregorio)