IPO Update: Vasta Platform Pursues $306 Million U.S. IPO

Jul. 27, 2020 1:59 PM ETVasta Platform Limited (VSTA)COGNY, KROTF

Summary

  • Vasta Platform has filed to raise $306 million in an IPO.
  • The firm provides educational content and digital services to K-12 partner schools in Brazil.
  • VSTA is growing revenue but is exposed to the COVID-19 pandemic in Brazil and the history of the Real's depreciation against the dollar.
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Quick Take

Vasta Platform (NASDAQ:VSTA) has filed to raise $306 million from the sale of its Class A common stock in an IPO, according to an amended registration statement.

The company provides education content and administrative technology solutions to K-12 partner schools in Brazil.

Vasta has performed well but is exposed to the growing effects of the COVID-19 pandemic and, for U.S. investors, the continued depreciation of the Real against the dollar, so I'll watch this IPO from the sidelines.

Company & Technology

Sao Paulo, Brazil-based Vasta was founded to build two platforms to provide K-12 education services through partner schools:

  • Content & EdTech - core educational solutions

  • Digital Platform - Partner school administrative integration

Management is headed by Chairman Mr. Rodrigo Calvo Galindo, who was previously Administrative Associate Dean at the University of Cuiaba and has held a number of management positions at various educational institutions in the past 28 years.

Vasta is the result of the acquisition by parent company Cogna of Somos Sistemas along with certain carve-outs of various elements of the Somos business.

Vasta has received at least $1.2 billion from investors including Cogna Educacao (OTCQX:COGNY), the largest private educational company in Brazil.

Customer/User Acquisition

The company acquires customer partner schools via direct sales and marketing efforts and provides both content and administrative technologies to schools, as shown in the chart below:

The firm has restructured its go-to-market approach by increasing its consulting sales force, improving training, and launching new collections or educational content.

General & Administrative expenses as a percentage of total revenue have been dropping as revenues have increased, as the figures below indicate:

General & Administrative

Expenses vs. Revenue

Period

Percentage

Three Mos. Ended March 31, 2020

37.5%

2019

47.0%

2018

79.8%

Source: Company registration statement

The General & Administrative

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This article was written by

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