Yesterday, Globant filed for an F-1 with the SEC to raise USD 86 million in an IPO in the NYSE, the second Latin Tech Company to have that privilege along with Mercado Libre, another Argentinian company. Paradoxically, this happens the same week that a New York court ruled against the Argentinian Government for the restructuring of its defaulted debt.
Globant is a symbol of Argentina´s renaissance after its 2001 crisis. Founded in 2003 as an outsourcing IT services firm, it took advantage of the abundance of talented and trained people in Argentina that were available at the cheap after the crisis and the threefold devaluation.
Since then, Globant has evolved its offering by providing more sophisticated services to its clients and refining its financial structure compensating for the loss in competitiveness of the increasing USD costs that the recovery brought with it and the complexities of the highly volatile Argentinian labor market.
Its current revenues stand at a staggering USD 120M with 82% coming from US clients like Google, Electronic Arts, Linkedin, Cisco or Coca Cola. Their revenues have grown at a 50% CAGR over the past 3 years.
The company´s bredath of services and geographies and their strategic stand in the IT sector have prompted WPP -the world´s biggest advertising company by revenues- to invest in the company and it now owns 21% of the company.
The only stain on their balance sheet is the USD 1.3 million recorded loss in 2012 which they attribute to USD 11.7 million share-based compensation charge; but it was probably also due to the high real exchange-rate fluctuations in Argentina. In 2013, they established a different compensation mechanism for exchange rates via bond purchases and they have already recorded USD 8 million earnings in the first 6 months.
The company is not alone in the world of successful technology companies of the 2000s from Argentina: Despegar is headed for an IPO, Restorando raised a 12MM Series B, Technisys is growing very fast and headed for a Series B itself, Onapsis is growing at amazing speeds in the US...
All in all, Globant´s success is a living proof that there is a lot of competitively priced talent in Argentina and that, with a management team capable of navigating the country´s financial instability, there are big opportunities to invest in its world-class technology sector. Those who decide their investment allocation based on political headlines alone are bound to miss out on a lot of opportunities.
Since then, Globant has evolved its offering by providing more sophisticated services to its clients and refining its financial structure compensating for the loss in competitiveness of the increasing USD costs that the recovery brought with it and the complexities of the highly volatile Argentinian labor market.
Its current revenues stand at a staggering USD 120M with 82% coming from US clients like Google, Electronic Arts, Linkedin, Cisco or Coca Cola. Their revenues have grown at a 50% CAGR over the past 3 years.
The company´s bredath of services and geographies and their strategic stand in the IT sector have prompted WPP -the world´s biggest advertising company by revenues- to invest in the company and it now owns 21% of the company.
The only stain on their balance sheet is the USD 1.3 million recorded loss in 2012 which they attribute to USD 11.7 million share-based compensation charge; but it was probably also due to the high real exchange-rate fluctuations in Argentina. In 2013, they established a different compensation mechanism for exchange rates via bond purchases and they have already recorded USD 8 million earnings in the first 6 months.
The company is not alone in the world of successful technology companies of the 2000s from Argentina: Despegar is headed for an IPO, Restorando raised a 12MM Series B, Technisys is growing very fast and headed for a Series B itself, Onapsis is growing at amazing speeds in the US...
All in all, Globant´s success is a living proof that there is a lot of competitively priced talent in Argentina and that, with a management team capable of navigating the country´s financial instability, there are big opportunities to invest in its world-class technology sector. Those who decide their investment allocation based on political headlines alone are bound to miss out on a lot of opportunities.
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