Maybe you haven’t heard of Valid. But, for sure, you carry in your pocket an item “produced” by it: the ID or driver’s license you use, the credit card and even the chip in your cell phone could have been issued by the company, founded by English people. in 1957 to print paper currency and which today is a corporation – a company with dispersed control.
As technological advancement is inevitable, the company has demonstrated that it has not stagnated. Proof of this is that, in the most recent quarter ended in September, 11% of Valid’s total revenue (R$64 million) came from new products – the segment was responsible for 22% of the company’s operating profit (R$29 million ) in the period.
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The logic is that, if the documents of the future are completely digital, the company will already have the structure ready to absorb the demand. “The essence of our business is back office (internal processes), which is to guarantee the integrity of the process and the veracity of the information”, says Ilson Bressan, CEO of Valid. “Our idea is to have a single processing conveyor that is capable of delivering different products (whether digital or physical) at the final end.”
The challenge for Valid’s future is to deal with transformations in technologies that are still outside its facilities. One of them is blockchain, a technology that has become a reference for validating transactions and Drex developed by the Central Bank. Valid’s CEO says that blockchain can be one of the ways for the company to build its platforms, but says it is not the only option for this. “Tokenization, Web 3.0 and blockchain, although promising, will still take time to become hegemonic.”
But there is still a way to go. According to Bressan, people are still fond of physical products. He uses as an example a digital bank that is a Valid client. The institution reported having a higher activation rate on physical cards than on digital ones. “The cost of producing the physical card is higher, but the priority is for the customer to activate the service”, he reinforces. A similar situation applies to the CNH which, for fear of not having a connection at an important moment, many drivers prefer to have the document on hand.
“There is a phrase: ‘the future takes a long time‘ (“the future takes a long time”), which illustrates this moment of transformation well. We had a check issuing business that we sold, but today more than 150 million checks are processed in the country. It is a market that we no longer operate in, but which is still resilient”, says Ilson Bressan, going back to the reorganization promoted by Valid in recent years. The company divested itself of assets abroad and focused on three fronts: identities, payments and mobile.
The restructuring began more than five years ago, when the management company Alaska, owned by Luiz Alves Paes de Barros and Henrique Bredda, became a reference shareholder in the company and today holds 30% of Valid’s shares. In this process, the house brought executive Ivan Murias to play the turnaround of the company and the debt reorganization.
Valid ended the third quarter without any leverage, which is the ratio of net debt to Ebitda – in 2018, this ratio was 3.2 times. Today, the company delivers an operating profit capable of covering 6 times its net financial expenses.
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With the departure from Murias in the first half of this year for the InfracommerceIlson Bressan, who had been the group’s executive since 2020 and headed Valid’s commercial and identity area, started to lead the business. The change of CEO also brought a different game plan: from an executive more linked to financial issues to one focused on growth.
“I have a more entrepreneurial profile, which the board deemed appropriate for the company’s current situation. We have to move the company at a faster speed to achieve the growth we want”, says Bressan, who aims to reach 14% of Valid’s total revenue coming from new businesses in 2025.
The company’s bets are on digital solutions for validating registrations (“digital onboarding”), eSIM, which are the chips for the most modern cell phones, in addition to working in digital government initiatives. Theses that are supported by the main shareholders, such as Alaska itself, the wealth management fund (“wealth management”) do BTGthe Norwegian Norges Bank and the managers Organon Capital e 4UMfrom the Malucelli family.
From January to September this year, Valid recorded revenue of R$1.58 billion, a decrease of 2.5% compared to the same period in 2023, a drop driven by the mobile front. In the same comparison, the company’s net profit increased 80.7%, reaching R$317.7 million.
