After an funding of BRL 260 million, Cortex acquires Geofusion and expands its knowledge intelligence mannequin
- October 27, 2022
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The agreement includes the purchase of all shares in the Geofusion company. Founded in 1996, the company has clients such as McDonald’s, Natura, Heineken and Cacau Show
THE Cortex just acquired the Geofusion, a company that operates in the geomarketing segment. The announcement comes just under a month after the startup received a new round of investments, a series C worth R$ 260 million, led by Lightrock and which included the participation of SoftBank Latin America Funds and Riverwood Capital.
The agreement includes the purchase of all shares in the geomarketing company, with which the startup has been in contact since 2015, has already made partnerships and has been having conversations for a year. With the scarcer market for funding and the uncertainties throughout 2022, the courtship came to a standstill. The entry of new capital gave new impetus to the negotiation and the deal was closed.
This is Cortex’s second acquisition in just over a year. In February 2021, it exclusively informed EXAME of the purchase of ITB360, which specializes in collecting data on other companies from public information banks.
For the new transaction, the executives applied the portfolio complementarity thesis that Geofusion can add. Created in 1996 as a geomarketing consultancy under the name Ion, the company became Geofusion in 2008. Today, it offers data intelligence and geolocation solutions for retailers and B2B2C businesses, such as manufacturers that sell their products in retail channels and marketplaces. .
With demographic, socioeconomic and business history information, brands can make better decisions about where to place a new unit or which products are most pertinent to the region. It serves more than 450 customers, including Natura, Heineken, Cacau Show, CNA and McDonald’s. In 2021, revenue grew by 30% and predicted a rise between 40% and 50% for this year.
Cortex, on the other hand, has a much greater appeal with B2B and B2C companies, but has no retail penetration. The portfolio, with around 200 clients, includes insurance companies and institutions such as Visa, Vibra Energia, Flash Benefits and Bradesco, which turn to the startup in search of big data and artificial intelligence solutions to assist in sales and marketing strategies.
“The great thesis that we brought into the house is that it is an acceleration of our strategy of being the leader in data intelligence in Latin America”, says Leonardo Rangel, CEO and co-founder of Cortex alongside Daniel Pires.
Furthermore, maintain the executives, the two have similar purpose and culture, which will contribute to the integration of the business model and also of the teams. With Geofusion’s 150 employees, Cortex reaches 500 people.
what are the next steps
In the short term, Geofusion will continue with its brand, now carrying the Cortex signature, and will be transformed into a Cortex business unit.
The leadership will go to the three co-founders: Pedro Figoli, former CEO, will be executive VP, Valéria Duarte, VP of Operations, and Susana Figoli, VP of product and engineering. The three are putting part of the proceeds from the sale of the company to enter as shareholders in the startup.
With the move, they join the founding partners, Leonardo and Pedro, Nathan Reiter, founder of ITB360, and the Softbank, Redpoint eventures and Endeavor Catalyst, Lightrock and Riverwood Capital funds. The other partners of Geofusion, the investment funds Oria and DGF Investimentos, opted to leave the business.
In a period between nine and 12 months, the company expects that it will have a clearer horizon for the integration of businesses and operations, with a view to strengthening Cortex. “When we look at the long term, the brand is going to be Cortex. We aim for an IPO in the long term, whether here or abroad, but now, in the short term, nothing changes”, says Rangel.
How the company wants to accelerate integration
In parallel, the company bets on three verticals to generate business quickly from the acquisition. The first is the launch of Cortex’s offer for customers who are in Geofusion’s portfolio; the second is to explore product complementarity and customer base; and the third is the connection between the ‘sales machines’ (structure of actions to generate leads), as one company focuses on outbound strategies and the other on inbound marketing.
“We are going for a very large volume of opportunities to explore different products and the complementarity of these projects throughout this base”, says Pires.
The company also has an eye on the Latin market, which is why the desire to become the largest data intelligence solution for sales in the region. Today, 80% of the revenue is made in Brazil and about 20% comes from other countries, including neighboring countries and Europe.
This process, according to the executives, has taken place organically with clients in Brazil taking the solutions abroad. At some point in the near future, however, it should be the result of a direct investment.
“We want to use all our experience from Cortex and Geofusion and bring it to these markets. Our clients are all multinationals, like McDonald’s, which has a position all over the world, but in Latin America, we certainly have a very strong offer and it will be a look at us in the coming periods”, says Figoli.
Currently, Cortex earns more than R$ 100 million per year. In 2021, it closed with 100% growth and estimates between 70% and 80% for this year.