The unicorn is a mythological creature that in ancient times was represented by a white horse, antelope legs, eyes, goatee and a horn in the forehead. It symbolized strength and was considered as an animal capable of defeating other stronger and larger species.This last definition was what led in 2013 the founder of Cowboy Ventures, Aileen Lee, to use that terminology (unicorn) to refer to a small group of startups that, although not listed on the stock market, had a higher market valuation to 1,000 million dollars.
The concept has not changed since then, with the addition that should be companies founded from 2003. On a global level, the total number barely exceeds 300.
The ranking is headed by Ant Financial, the fintech of the Chinese giant Alibaba, with a valuation of US $ 150,000 million; his compatriot Bytedance, owner of the ascending social network TikTok, with US $ 75,000 million; and the American Infor, which offers cloud services, with US $ 60,000 million.
Although they are listed on Wall Street, albiceleste firms that exceed US $ 1 billion are also called in the same way, such as Mercado Libre and Globant. Take off is another that is included in the group, since its market capitalization is usually around that floor, although with swings.
The economist Diego Martínez Burzaco, director of MB Inversiones, assures iProUP that "the Argentine unicorns are a clear example of successful companies since, despite the adversity of the local macroeconomics, they managed to transcend borders."
"This is possible from a solid idea applied efficiently, using the most advanced technology and with the business vision of opening the business to the world," Martinez Burzaco adds, indicating that these companies "chose to jump the capital market local and go directly to Wall Street to look for new investors. "
Why the Nasdaq and not the Buenos Aires Stock Exchange? It is a matter of magnitudes. At the time of making its public offer, the funding required for the expansion of its operations did not exist in the country. Nowadays:
"They are big companies with very good returns for investors, they innovate permanently and are less and less dependent on the Argentine market, so that they avoid the uncertainty of the local situation and the permanent changes of the rules of the game."In this sense, the Argentine unicorns were surprised by the temporary suspension of the Law of Knowledge Economy, voted unanimously last year in the Senate and whose modification will be discussed in extraordinary sessions.
The rule proposed as benefits a lower cost of employer charges and Income Tax, fiscal stability, tax relief for exports and promotion of new businesses, among others.
Recent evolution
The three technology companies are listed on the Buenos Aires Stock Exchange in the form of CEDEAR (Argentine Deposit Certificates). Specifically, it is about:
- Certificates representing shares of foreign companies
- Designed to be transacted in Argentina.Although Mercado Libre, Globant and Despegar are companies of Albiceleste origin, each has a holding company domiciled in the United States that contains them.
In the case of Mercado Libre, its valuation is already around US $ 33 billion on Wall Street, as a result of the extraordinary course of its action in the last five years. In that period, its price advanced by no less than 420%, a figure that implies an average annual increase of almost 40%.
Its two best years were 2017 (when the paper price doubled) and 2019 (when it advanced almost 100%). So far in 2020, its price in dollars rose 17%.
As for its listing on the Buenos Aires Stock Exchange in the form of CEDEAR, its rise not only reflects what happened in the New York square, but also the way in which the dollar moved. In fact, comparing the evolution in both markets, the implicit devaluation of 2018 and 2019 is around 100% per year on average.
On the Globant side, it started trading in the Big Apple in July 2014 at $ 10 per share, and at the end of that year it was worth 40% more. At present, it is located at US $ 124, so the accumulated of the last five years is an amazing 800%, with an annual profit of 55% in dollars. His best year was 2019, when he advanced 110%.
Its CEDEAR also shows a more than satisfactory evolution, because in the short period of life it shows a remarkable rise.
On the Despegar side, he had an auspicious debut at Nasdaq in July 2017: the first day he climbed 22%. Unlike the other local unicorns, their price shows a significant deterioration: from US $ 27.50 (late 2017), to $ 14.50 (today).This tourism services company concentrates 60% of its business in its Brazilian subsidiary Decolar. Its stock advanced 8% in twelve months and its market capitalization reached US $ 1308 million, and then fell to US $ 840 million. Currently, it is worth about $ 1 billion.
For Gabriel Holand, CEO of HRGlobal "the growth of the value of unicorns is a clear sign of the good reception that the market offers to value-added proposals that come from the digital world. offers the world of finance. "
How to invest from Argentina?
There are two ways to take advantage of the good moment of the Argentine unicorns in the Stock Exchange: directly on Wall Street or via the local market through the CEDEAR. For those investors who decide on the first option, the requirement is that they have an account open at a bank or broker in the United States.
As for the CEDEAR, they are representative certificates of foreign companies that are marketed in the Buenos Aires Stock Exchange. They are an instrument designed so that the Argentine investor can operate with frontline papers globally without requiring an account abroad.Precisely, its main attraction is that they allow avoiding local risk, to which the possibility of dollarizing the portfolio is added, since the behavior is adjusted by the movement of the cash with liquidation.
"Those who wish to buy shares directly in New York through our platform can do so without inconvenience if they open an account in the US through the company. The minimum amount for the operation is US $ 7,500, and the commission it's 0.5%, "Flavia Matsuda, Research Coordinator of Invertir Online, tells iProUP.
For his part, Daniel Vicien, Director of Investment Funds at Balanz, says: "The shares of these and other companies listed on Wall Street can be purchased in Argentina, or directly in that place."
"Anyone who chooses this alternative and does it through our company should only have an investment account open in the US, which has no maintenance cost," he adds.
Matsuda adds: "The second option is to do it through the local market in the form of CEDEAR." In this case, the platform also allows you to invest in these instruments with a fee of 0.5% (it can go down to 0.3% and 0.1% for users with frequent operations) and does not require a minimum.
"As they operate in the market regulated by the National Securities Commission, if the CEDEAR of a company is bought and sold here, when its price rises, that result is exempt from the Income Tax," the accountant Sebastián M tells iProUP Dominguez, partner of the SDC Tax Advisors study.
According to the expert, different is the case of ADRs, which are certificates of shares of Argentine companies listed on Wall Street, which are reached by the tax.
What to expect
For Holand, "the potential of unicorns is enormous, so they generate interest both in the region and in industrialized countries."
He adds that "they have a great challenge ahead, since investing in technology is just the prologue of the story: the most important and disruptive effort is to develop business intelligence that allows them to identify the needs and particularities of their customers, to meet the wishes of a constantly growing demand. "
Regarding the outlook for this year, analysts consulted by iProUP admit that, as of the modification of the Law on Knowledge Economy, negative signs arise that the final wording may affect the normal evolution of the companies reached.
However, given the magnitude and the conformation of the business of the Argentine unicorns, this would only be a minor counterweight compared to the possibilities presented by their projection at international level, which they consider in frank expansion.
In this sense, Vicien argues: "Globant has tremendous potential" because among many other customers it has Google, Linkedin, Dell, Yahoo, Electronic Arts and The Walt Disney Company. "" It goes without saying that the company is very well conceptualized by the quality of their developments, "he adds.
As for Mercado Libre, he believes that the brake on the advantages offered by the Law of Knowledge Economy will be overcome without major problems: "He is very solid in Latin America, with 60% of his business in Brazil, 20% in the rest of the region and barely the remaining 20% in Argentina. "
"To this must be added that ecommerce is growing by leaps and bounds globally and in the long term it is foreseeable that there will be a consolidation of the sector, which can help you generate even more value," he says.In the case of Despegar, its activity is carried out in an extremely competitive sector, despite which it has very good chances for the future, "says Vicien.
To meet this challenge, he decided to strengthen his competitive position through a purchase agreement for $ 136 million from Best Day Travel Group (BDTG) that has operations in Mexico, Brazil, Colombia, Chile, Uruguay, the Dominican Republic and Argentina.This acquisition is considered as the largest purchase operation in the tourism industry in the region and with it, the company expects a 25% increase in its revenues and stand with greater force before the Brazilian giant CVC, which recently acquired Argentine players Avantrip and AlMundo.
The main Argentine unicorns face the future with marked optimism, beyond navigating two different oceans: one of calm waters, in which there are no rivals of weight, which is the one that furrow Mercado Libre and Globant; and another with a more hectic course, through which Despegar circulates in an area with large competitors.