Benchimol, now 43, owns roughly 11% of XP Inc. At the end of 2019, the company had gathered 5.1 billion reais ($942 million) and 1 billion reais ($184 million) in revenues and net income, respectively. XP Inc, which carries out its trades on the Nasdaq, has a market capitalization worth $26.9 billion. Benchimol preferred not to comment about his net worth.
Guilherme Benchimol’s Road to Success
Intending to follow in the footsteps of Charles Schwab, a fellow billionaire and pioneer of brokerage, Rio de Janeiro native Benchimol began working in the industry at the age of 18. He began by interning at a securities firm before enrolling in the Federal University of Rio de Janeiro to study economics. After graduating, he launched XP Investimentos with his business partner of the time Marcelo Maisonnave, in May 2001 after working at two more firms.
The Turning Point
On his personal LinkedIn, Benchimol mentions that the turning point in his life began while he was working in a 25 square-meter space with his business partner, with ten second-hand computers that they had bought at an internet café. He also notes that he and his business partner noticed how the people around them were underconfident when making their first deals and did not know how to invest in variable income.
Putting this insight to use and investing in education to get their first customers, their firm changed the game in the market.
Getting Ahead in the Game
To give his firm a head start, Benchimol sold his car and borrowed 5,000 reais ($1,000) from his half-brother. He started by only offering stock trading and financial education to his customers first. Two years later, in 2006, XP opened a second office and expanded into asset management. In 2009, Benchimol added an insurance brokerage, and then in 2014, the company opened its first overseas office in Miami.
Gaining National Attention
XP garnered the attention of leading financial institutions in Brazil with its rapid growth. In May 2017, Brazil’s largest bank by assets — Itaú Unibanco — obtained a 49.9% stake in the company for 10 billion reais ($2 billion). By that time, XP had acquired several other firms to expand its horizons, namely a digital investment platform, a personal investment education site, and an independent research house. In December 2019, the firm listed with a rebranded name XP Inc. on the Nasdaq.
Benchimol further writes on his LinkedIn that his purpose has been to help Brazilians make better investments, by offering them investment advice, non-existent trading fees, and an array of products. This helped the business take shape, transforming savers into real investors.
XP Inc: Market Cap
The company soared to a $19 billion market capitalization, with its December IPO, in the U.S. the previous year. The valuation briefly earned Benchimol the status of “billionaire.” Amid the spread of the global pandemic, XP shares reached a low of $16.96, dated April 2, making it a 50% decline compared to the closing price on the date of the IPO. Following that, Benchimol was pushed back into the three-comma-club, with the stock rallying 170%.
XP Inc: Ranking
Regardless of being successful, XP's rank being Brazil's top brokerage company may be threatened by one of the country's largest banks, BTG Pactual.
BTG Pactual submitted securities filings on June 22 to raise 2 billion reais ($370 million) in funds to upgrade its digital banking offerings and to take back market share from XP and contending lender Itaú, which is now XP’s shareholder by 46%.
Still maintaining activity, on June 10, XP closed a deal acquiring DM10, a Brazilian online insurance marketplace, further strengthening XP’s existing insurance business.
On his LinkedIn, Benchimol reveals that his motivation comes from proving to his employees that there are no limits to dreaming big and that they are just at the start of a great journey.
About the Author
Luigi Wewege is the Senior Vice President, and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an Instructor at the FinTech School which provides online training courses on the latest technological and innovation developments within the financial services industry. Luigi is also the published author of: The Digital Banking Revolution.