Welcome to the Sidoti Virtual Microcap Conference, and thank you for joining us today. I'm Anja Soderstrom, a Senior Equity Analyst here at Sidoti. As I mentioned, next up we have Nvni Group, its ticker is NVNI, listed on Nasdaq. With me today, I have Pierre Schurmann. He's the Founder and CEO. This will be conducted as a presentation by Pierre, followed by Q&A. If you would like to participate, you can submit a question in the Q&A function at the bottom of your screen. With that, I'm happy to hand it over to you, Pierre.
Thank you, Anja. Hey everyone. Really great to be back here and to be presenting to all of the investors that we have and have followed. We have, you know, thousands of investors that really support, really appreciate your support, and getting us visibility in the market. I know there's a lot of chat going on, and I really appreciate that. It's an honor to be able to share a little bit about where we're at. Very soon we should be able to announce first half earnings. We're almost there, so hang on. With that said, for those of you that don't know me or Nuvini, Nuvini is a Brazil-based, Nasdaq-listed, serial acquirer. We acquire SaaS B2B businesses in Brazil right now. We're looking to do something similar in Latin America.
I'll go over, you know, company or thesis, a little bit of the market, our overview and track record, pipeline, and where we're at, some AI initiatives, which are actually pretty interesting. You know, CompSynth Team, for those of you that don't know us. B asically, as I mentioned, we acquire, you know, multi-sector. We're agnostic acquirers of SaaS B2B businesses right now in Brazil. Our criteria is primarily focused on niche markets, with very strong leaders in these markets. It's really important for us to acquire the first or either first or second player in each of the segments that we're acquiring. We don't have verticals because we're too small to have verticals. There's only seven companies right now. It wouldn't make sense to, you know, create one vertical per company.
We are, you know, looking at a really interesting moment in the market, given the lack of liquidity in Brazil, and given the opportunities that we've seen and increase in pipeline. We are accessing more and more very interesting companies that are under-targeted by, you know, private equity, search funds, and other, you know, acquirers, globally and even regionally. As an overview, you know, 2024 numbers, 23,000 clients. No client represents more than 0.25% of revenue. It's very diversified. 92% recurring revenue. These are SaaS, you know, Software as a Service, billing monthly. It's not a service business. It's really billing monthly software. These are RAG numbers. So divided by 5.5, $193 million, 61% gross profit margin, 13% organic growth. We're very focused on building the business through inorganic growth. We had a $51 million RAGs, EBITDA of 26%, which is actually almost double of the previous year.
I'll talk a little bit about the company. As an example, we have, say, DataHub, which is one of the largest analytics companies. Think of it as Palantir for Brazil. We have Epay Digital, which is a leading ERP management software for eyeglass shops in Brazil, market leader. We have other companies that are also very well positioned. We don't go into individual company revenue or breakdown for legal issues and strategic issues. On the combined, of the companies, every single company that we have is growing, generating EBITDA and generating cash. Every single business that Nuvini has is cash flow generator, and that's really important. Our investment thesis, I'll go a little bit over investment thesis. This is just an overview. Basically, our value proposition for investors is giving investors access to a diversified portfolio of cash-generating and good-performing companies right now in Brazil in a diversified way.
We're not focusing on any specific segment. We understand that through Nuvini you can have access to the Brazilian market and Latin American market, which is growing at twice the pace of the global market in the SaaS area. For the founders, which are our other target stakeholders, we are an alternative to liquidity and exit, and that's really important as a reference. In Brazil, there hasn't been an IPO since 2021. Not a tech IPO. There hasn't been a single IPO in Brazil since 2021. When we look at the optionality for Brazilian founders and tech companies, with interest rates at where they are, there really aren't a lot of alternatives.
Founders can find a way or path in Nuvini to seek liquidity and align long-term values and long-term capital returns of the companies they build as they stay on board and we build the companies together once they come on board. Latin America and Brazilian SaaS market is relevant. In Latin America, it is $21 billion, and in Brazil is $9 billion, growing at a really interesting pace. It will double by 2030. This is a fast-growing market. It's far less, it's far underpenetrated than the U.S., Europe, and even some parts of Asia. There's a lot of low-hanging fruit opportunities with this low penetration for us to acquire companies that are starting, you know, profitable and growing, but still have a long way to go to capture market value. As I mentioned a little bit, market value is doubling by 2030 to $18 billion. That's what we're looking at.
It grows at, again, global SaaS market grows at 12%. It grows at half the pace of the Brazilian market. A little bit about Nuvini, our overview and track record. As I go in depth a little bit more of our companies. As I mentioned, SS Autica, which is Epay Digital, is the same company. I already talked about them. Effecti is the largest platform that allows small, medium, and enterprise businesses to sell to the Brazilian government through online auctions or online bidding process. Last year alone, Effecti transacted $13 billion. So $13 billion of goods and services were sold by Effecti clients to the Brazilian government in a transparent and a clear, and a very effective way. Right? They're absolutely market leaders.
Onclick is an ERP that allows companies such as Vivara, which is one of the largest jewelry firm chains in Brazil, to sell online, offline, and through the different. They're a multi-channel connector ERP. I mentioned DataHub already. Leadlovers is a digital automation platform for different segments. It's a little bit of a vertical, in specific market marks for SMBs. Mercos connects over 1,500 industries with about 14,000 independent sales reps. And Munddi, which was our latest acquisition, offers cross-border e-commerce and logistics and has a lot of synergies with all of the companies we acquired so far. The portfolio is diversified. We're not concentrating on any specific segment. We're looking for the best businesses in each vertical. That seems to be working so far, and we want to keep on doing that. As an overview, revenue has been growing at an interesting pace.
More importantly, on the right side, you'll see our adjusted EBITDA, which is, which generates cash. It converts, you know, 65% of that is converting into cash, consistently has gone from 15% back in 2022. It closed, ended up in 2024 at 30%. There's an interesting trend going on there. We're able to expand margins and expand EBITDA as these are SaaS businesses. Obviously, the margin expansion should be pretty obvious as we increase prices and the structure, the company and the operation and the OpEx stays the same. As our growth is driven by M&A, similar to Constellation Software, Vitec, Roper, and others, pipeline is obviously very important. As a side note, for those of you that don't know me, prior to founding Nuvini, I founded Bossa Nova. It's called Bossa Invest now. Bossa Invest, I made 900 personal, or direct, 900.
I made 900 direct investments in tech startups in Brazil while I was in Bossa Nova from 2011 to 2019. I had a little bit over 100 exits from those. Bossa Nova today is still the most active VC fund in Brazil and Latin America. Outside of the United States, it's one of the top 20 most active funds. Not only have I been an operator, but I have invested in tech for quite a while, looked at over 20,000 companies over the past 15 years. That gives me a unique perspective in analyzing these companies along with my team, along with our analysts, but gives us a lot of access to deal flow. Today, our deal flow keeps building. We're at $190 million top line, 2025, mapped deal flow. These are companies we've spoken to founders. We understand the revenue.
We know what they've done in the past six months or so, 12 months or so. We really have some in-depth into these companies. We have nine deals in negotiation, which correspond to about $40 million in revenues for 2025, $18 million EBITDA. As you may have noticed, our EBITDA from last year was 30%. The pipeline that we're looking at has a much higher EBITDA, as we're being able to be more creative and more selective on the types of companies we build while still maintaining the quality principles of the selection that we're making. Real quick here, we're acquiring SaaS B2B, low risk, low churn. The numbers public are across the border. Churn is below 4%. Companies that have good teams, interesting markets, and that could make sense for us to bring here and bring our experience and people and scaling these businesses.
I know a lot of people talk about AI, so I avoid talking too much about it, but it has been really fundamental and instrumental. I think we'll be able to show some of that when we announce our second half, our first half numbers. I have been personally really involved in deep diving into coding. I founded an important site. Another side note, back in 1996, I co-founded what ended up being Brazil's second largest search engine. That was before Google even existed. I've been a coder, also a programmer. Been back to programming, piping, learning, and really deep diving and trying to understand models that are working in the U.S. and working in Asia and other places. We've been able to look at that from two perspectives.
One perspective, obviously, is there's a risk if AI keeps going at the pace it is, and it's going, there's a risk for our business, obviously, in every business or lots of businesses. There is an opportunity. We're looking to embrace or deal with both. To do that, we created an umbrella called NuviniAI Lab , which is just a way to organize all these different initiatives that we have within a structure. It allows us to do some experimentation. We have great partnerships with Oracle, with NVIDIA, and other partners. We're not having to put the CapEx to do these experimentations. That's really important for everyone to know. Bringing best practices, playbooks, doing pilots. We did the NuviniAI Prize about two months ago, went from zero to 10 products that were actually generating revenue, three finalists.
The three finalists that won the competition, or the three finalists for the competition, are companies, are products that are generating revenue, selling to Nuvini's base. We should be able to have some interesting perspective to show actual numbers, and not only fluff, on top of only these initiatives that we had in very little time. That's a little bit what Nuvini AI Lab is. Basically, we're looking into internally, as we look into the threat, if you may, I think there's opportunities in sales and marketing, customer support, software development, HR, legal, and finance. We have different initiatives on all these different areas, led by teams within the companies. We're not allocating new resources. It's more about bringing the knowledge and bringing the partners and bringing the technology that's already there. It's being used by other companies successfully, into Nuvini to increase margin.
As I said on a newsletter I put out two months ago, you know, we're already, we're seeing an 8% impact in operational costs. Obviously, there's more to come, and we're very satisfied about implementing and not only talking about AI here, right? Q3, you know, we're refining these three projects, working with new concepts, which we'll announce probably, you know, within the quarter still. In Q4, we want to scale that, because we believe we have a really interesting opportunity to arbitrage the knowledge that we're capturing or we're learning or we're getting from U.S. and Asian and other players and bringing it to Brazil and the markets that we operate and to the companies that we're looking to acquire. We created an acquisition front. We created something called the Nuvini AI Index because we believe, you know, AI eventually will potentially disrupt SaaS. People say SaaS is bad.
I think there's some times for that to happen yet. We are taking that into consideration when we look at pipeline and we're looking at our M&A strategies. It's not only about product, market, you know, revenue, teams. We are taking AI seriously as a risk and as an opportunity. We created an index that allows us to add that to our analysis and not simply, you know, acquire the companies like we were doing prior to the AI evolution. Last but not least, a little bit of comps. You know, we're still a very, very discounted company. We're very in our very early days. I know that. We have a lot to prove, a lot to execute upon. The market conditions are far better than they have been since I founded Nuvini with interest rates at where they are, the lack of liquidity, our access to capital markets.
We're, you know, very, very positive on what we've seen happening this year and where we see the opportunity for the next 12 to 18 months. When we look at the players that have been around for far longer than us, some of us for as many as 30 years, we think that we're on a path that at some point in time, the market will understand that and evaluate us at a multiple that's closer to our peers. On the teams, this is, to finalize here, part of myself, Toto is my Co-Founder and CFO. He's done over 80 M&A transactions in his life and other businesses. He's had a lot of M&A experience and operational experience. We worked together in Bossa Nova and a couple other deals. Been in different businesses for over 20 years. Board of Directors, we have a very diversified Board of Directors.
Scott came from, was CFO for Plout and a couple other companies, U.S. listed and private companies. Marcelo Gonzalez, who is managing partner and founder of Domo. Domo has delivered to VCs in Latin America. He personally invested in six companies at seed stage that today are unicorns. It's really rare in Brazil. He's had a lot of tech experience and he's been invaluable to the board. Marco Leone has amazing enterprise experience having run Computer Associates for Brazil, Latin America, and OpenText. Last but not least, João Leite, who was for 20 years CTO of Itaú. Itaú is the largest bank in Latin America. We have a diversified board with complementary experiences that help guide us and give us counterpoints to what we're doing and how we're executing. We see that we have an interesting opportunity right now to do good acquisitions, favorable window.
We don't foresee that Brazil's interest rates are going to go down anytime soon, at least not in the next two quarters. We believe that we have a really interesting opportunity to continue to execute through M&A. With that said, that's it.
Thank you, Pierre. That was a good overview. To the audience, if you want to participate in the Q&A, you can submit your question at the bottom of your screen. We have a couple of questions populated already, but I'm going to start. You've targeted four acquisitions this year. You've done one. How does that compare to the number of acquisitions you did last year? How has the environment changed for the evaluation and accessibility?
Sure. Last year we did no acquisitions. The year before we did one acquisition, and we've already done one this year. We spent the first half of the year structuring and building pipeline and trying to understand processes so we could get the engine back going, back to speed. When we founded Nuvini, we acquired seven companies in a period of eight months. We would love to go back to that pace. We're not saying that we're going to go back to that pace. Our pace will be probably four to six acquisitions, three to four acquisitions per year. We have a little bit, a little ways to go still.
How about the environment for targets?
The environment has improved substantially, as, again, the interest rates are higher, less liquidity. There were quite a few incumbents doing acquisitions, or a couple of vertical acquirers doing acquisitions, such as Local Lab doing an e-commerce, Magalu doing also an e-commerce, and a few others. Right now, the way we look at the pipeline, of those $40 million that we're in, probably about $37 million of them, we have no competitors. It's a really unique moment to be acquiring companies in Brazil.
Okay, thank you. Some questions here from the audience. Can you talk about the typical acquisition? What multiples do you target and other metrics in terms of growth rates and margins?
Sure. We're looking at companies doing anywhere between $1 million and $5 million in EBITDA. EBITDA is a big driver for us, converting at least 65%- 70% of that in cash flow, growing above 15%. We're now targeting higher EBITDA margins, so between 30% and 40% EBITDA margins. That's basically where we're at. Obviously, the most important thing is, you know, what is the quality of the revenue? No concentration, consistency, you know, SaaS, recurrence. That's a really, really important driver for us.
As you increase the EBITDA target, do you give up some of the growth for that, or are you still looking at 15% growth?
For us, 15% growth is slow. We're seeing companies with a lot more growth. I think 15% is the low end of the range. We comfortably could acquire quite a few companies with at least 15%.
Okay. What is your source of capital? Do you borrow in US dollars?
Our source of capital, historically, we had equity through private and then after, public investors. Right now, and this is public info, I can say we just did a bridge. That bridge is part of a bigger transaction that's also public, that will be that also. For the foreseeable future, we would like to keep using that, given how we allocate that capital to acquire companies that generate cash flow that allow us to have a better return or have a return on that capital, and not dilute the shareholders. Seems to me like we should be able to do that, like Constellation has done for 27 years, 30 years now, for the foreseeable future.
Okay. Another question here. Are you looking to remain owners of these businesses, or will you eventually look to IPOs to vested shares as a form of monetization?
These businesses are too small to IPO, you know, if you look at them and look at our size. They still have a long way to go, very good cash generators. They're very interesting businesses. They have good potential to expand in their markets. We are permanent capital. If you look at, you know, Constellation, Vitec, and Roper, I don't believe they have ever sold a company in 30 years.
Okay. Another question here is, a lot of questions here around your earnings, when that will be released.
Right. As I mentioned in the beginning of the call, by the end of this week, we'll share the dates. A ll right.
Thank you. It seems like it's very much anticipated here.
Yeah.
Are you also looking to start reporting your operating results on a quarterly basis?
Sorry.
Are you looking at also starting reporting on a quarterly basis, which is more the norm in the U.S.?
It will depend. Right now, we're doing half year. It will depend on a couple of different things. Potentially, yes, in 2026.
Okay. In terms of also your acquisition targets for the year of four companies, and you acquired one so far, it seems like you're going to have a busy second half. Do you feel confident in achieving that target still?
We have the term sheet signed. We're in different stages of due diligence. It's M&A, obviously. We do have the pipeline to do that and the term sheets to do that. M&As are almost like marriages. Sometimes they could get delayed over time. We do have the pipeline and we do have a good degree of confidence, yes, that we will be able to execute that.
Okay. A recent initiative that you also mentioned in a presentation is that AI Lab and the Prize. How important is that for you or Nuvini?
We are looking at AI on a very positive basis or a very disruptive basis. I think that when people, these initiatives are very important. Answering the question specifically, these initiatives are very important.
Okay. Another question here is, do you anticipate the need for capital over the next year to 18 months? Are you committed to keeping the balance sheet clean, such as free of warrants and exceptionally diluted financings?
Right. Definitely no warrants. We will raise capital to acquire companies, right? As I mentioned, we have a $200 million pipeline. We have $40 million of deals in negotiations that, at cash conversion, would bring in about $10 million in cash over the next 12 months if we had the capital. If we had the capital, we would use the capital to bring more revenue and increase the business. No warrants. I can tell you that.
Okay. There was a question also in terms of your share performance. It's been a bit volatile for the year. What drove those spikes early in the year, do you think?
If someone knows the answer to that question, I'd love to meet them.
In general, the acquisition should be a good catalyst for your shares, right?
Yeah. I'm looking at a three to five-year horizon, right? The volatility at the beginning of the year, it's obviously not what we'd like to, but it was what it was. We're looking at a three to five-year scenario where interest rates continue high in Brazil, pipeline continues to build, and we continue to expand margins in the business, you know, continue to work in the way we have worked in the past. I believe the market will value the business closer to where it should be valued, but then again, the market decides.
Yeah. In terms of the acquisition pace, if you're going to step that up, what are your capabilities of sort of digesting these acquisitions if you have a lot coming in at the same time?
Yeah. As I mentioned, between October 2021 and March, April of 2022, we acquired seven businesses and they're here. That was, I think, to do four deals a year is, you know, if you look at our comps, they're doing 30 to 60 deals a year, right? To do four deals a year, if we can't do that, we shouldn't be in this business.
Yeah. In terms of closing the valuation gap, you're much smaller than a lot of those peers that you, and a lot more early in the innings. I guess it will take a while to build up some rapport with investors and prove yourself. As you acquire more companies, hopefully that will happen naturally. I actually don't see any more questions here. I'm going to hand it over to you, Pierre, for some closing remarks. I know you have a pretty hectic one-on-one schedule already, but if anyone would like to catch up with Pierre outside of this presentation or follow up on some questions, I'm sure he will make himself available. You can reach out to us or Pierre directly, so we can make that happen. With that, I'll hand it over to you, Pierre.
Thanks, Anja. Thank you everyone for your time today. I hope I was able to share a little bit of where we're at and where we're going, a lot within the scope of what I can actually say. We are very optimistic regarding pipeline, market conditions, and what we've been able to actually do in AI. By the end of this week, we'll announce the date of our earnings or first half. I am much more confident than I was at the beginning of this year. I can tell you that. I hope you continue to support us as we build Latin America's principal serial acquirer. Thank you.
Thank you. I look forward to your results release and maybe more releases in the fall. With that, I thank everyone who participated and have a good rest of your day.
Thank you. Bye-bye.