The Ultimate Guide to Venture Capital in Brazil [Updated 2020]

Contxto — The private equity sector has been progressing rapidly in Brazil. With economic stability firmly established, dropping interest rates, and low country risk, the local market is already an attractive option for venture capital in Brazil.

However, storm clouds gather ahead. Brazil was going through rough economic waters even before the Covid-crisis. We shan’t know what damage will be done until they have cleared.

Nevertheless, Brazilian venture capital investors are well-known for their good eye and resilience. Moreover, they are part of one of the most diversified ecosystems with some of the keenest startups when it comes to scaling internationally.

The current economic turbulence may be just the opportunity they needed!

Venture Capital in Brazil in 2020

An Overview

Recent exits

So, with Covid, global economic turmoil, and the rise of protectionism, is all lost? Well, perhaps a quick look at some of Brazil’s startups most recent exits this year may give you a flavor for how active the industry has been, even in uncertain times.

Evolution of total invested

However, compare 2020’s activity with years past and the picture bleakens somewhat.

Halfway through the year and we haven’t even reached the halfway mark of the amount raised in 2019. Let us hope things pick up—or that VCs and companies are being shy about announcing multi-billion dollar investments…

A full breakdown

Investments per stage

It’s pleasing to see that VCs in Brazil are keeping true to their word; they are fueling the best ideas with money to make startups go from zero to hero.

Just shy of half the deals go to pre-seed and seed rounds. But don’t let the raw numbers lull you into a false sense of equanimity.

See that singular Series F round? That was Nubank bagging US$400 million. That was 15 percent of the entirety of cash invested in all of 2019 by VCs in Brazil—US$2.7 billion.

Furthermore, one would like to hope that those undisclosed rounds stick to the pattern, but we just can’t be sure, which does skew our perception of the round distribution somewhat. Check the graph below to compare the number of deals per stage.

Unicorn valuations (US$ billions)

Similarly to the inequity of equity as seen in the different stages above, not all companies are created (or rather valued) equally.

It’s surprising that even amongst the startup giants, those fabled one-horned creatures, there is a massive disparity in valuation. From the bog-standard single billion companies like EBANX, to the ten-horned Nubank.

(We’ve deliberately left the likes of PagSeguro, Stone, and Arcoseguros out of the mix. Those, though once startups, are now public companies whose valuation is left to the winds of public investment.)

What does this unicorn diversity say about the VC ecosystem though?

Well, firstly, it says that there is a diverse spread of companies for VCs to choose from. And secondly, with so many unicorns, these VCs clearly have a jolly good eye for investment (Brazil’s massive and often untapped market can’t hurt either).

Investment per industry in 2019

Perhaps the clearest example as to why some companies grow so enormous while others stay petite can be found, not in an analysis of individual startups, but rather in a breakdown of the sectors that they make up.

The pie charts below are delightful for this reason. Both show the portion each sector has, but one has it divided by individual investment deals and the second by the cash invested.

As you can see, for instance, agtech and proptech may have the same amount of deals under their wing, but you can barely see agtech in the monetary value breakdown of the second chart.

Meanwhile, proptech scoops up the second-largest pile of cash after capital hangry fintech.

Conclusion: A small handful of proptech companies are getting shedloads of cash!

Top Venture Capital Funds in Brazil

So, without further ado, we give to you our top Venture Capital firms in Brazil.

monashees

Go big or go home, that’s how we’re starting this raking and that’s what this VC lives by.

monashees is perhaps one of the most well known Brazilian investors and the reason is its sheer scale. Its tickets can go as high as US$15,000,000, which is a load of cash if you consider they start with nascent startups so as to nurture them as they revolutionize markets, create value, and improve people’s lives through technology.

On the other hand, don’t be too surprised about the amounts this VC invests, since a third of its portfolio consists of the capital intensive sectors of fintech and logistics. 

monashees has 4 unicorns to its name and has led five of its past 10 investment rounds.

Portfolio Cheat Sheet:

• Total startup investments: 79; of which 69 are from Latam; of which 55 are from Brazil
• Notable startups: Buser, Conta Azul, Enjoei, Fazenda Futuro, Grupo Zap, JusBrasil, Kovi, Loft, Loggi , MadeiraMadeira, Neon, Pipedrive, Rappi, Volanty, Uala
• Key exits: 99, Algenis, Strider
• Latest investment: Seed round worth US$4.6 million in Pipo Saude on June 11, 2020

e.Bricks Ventures

As a VC, investment is less about money than it is about time. Obviously the money makes a load of difference, but so too does the time spent in making that investment shine. 

This is what e.Bricks wants to show the world, that its long operational experience has shown that the best path is one taken alongside their portfolio companies, adding value every step of the way.

So, apart from the sweet, sweet money, founders can expect help with further fundraising, C-level hiring, tech architecture, and business development, especially for B2B companies via e.Bricks’ established Brazilian network.

Their focus is clearly on Brazil—where the vast majority of their investments lie—, but it is important to note their commitment to Latin America. Even if that commitment so far can only be measured in one other startup in the region—S4, an agtech from neighboring Argentina.

Portfolio Cheat Sheet:

• Total startup investments: 33; of which 33 are from Latam; of which 32 are from Brazil
• Notable startups: Contabilizei, Infracommerce, Rock Content, Acesso Digital, Ambar, Sanar, Arquivei, Avenue, BCredi, ConexaSaude, JusBrasil
• Key exits: App Prova, Eótica, ERPFlex
• Latest investment: Seed round worth US$9.3 million into Trybe on February 27, 2020

GE32

“Takes one to know one,” that’s the philosophy GE32 wants to live by. They believe that what sets them apart from the typical VC is that, not only have they been entrepreneurs, they continue to be. By day they are founders and by night early-stage investors. (Or is it the other way round?)

The proof backs them up, say Founders Florian and Mate, who launched not one, but two of the largest Latin American startups: Printi and Loft. The whole point of keeping on toe in each pool is, firstly, to share out the startup success capital, but also the expertise via entrepreneur-to-entrepreneur guidance.

Portfolio Cheat Sheet:

• Total startup investments: 68; of which 32 are from Latam; of which 16 are from Brazil
• Notable startups: Frubana, Gympass, QueroBolsa, Liftit, WildLife Studios
• Key exits: QuintoAndar, WorldSense (acquired by Loggi), 99 (acquired by Didi)
• Latest investment: Series A worth US$60 million invested in Wildlife Studios on December 5, 2019

Canary

The focus is on making Brazil the very best. Canary wants Brazilian countries to disrupt the world through tech, partnering with founders right at the start of their venture capital journeys—Seed or Series A rounds.

Canary explains this propensity for neophytes due to a funding gap in the market at the very early stages in Brazil. So this VC went all in and became fully focused on these particular startups.

This early-stage strategy isn’t without its benefits though. Canary believes that the first round is the best time to start a long-term relationship with a founder, especially in a young startup ecosystem like Brazil’s.

Portfolio Cheat Sheet:

• Total startup investments: 66; of which 66 are from Latam; of which 65 are from Brazil
• Notable startups: Buser, Docket, Idwall, Loft, Trybe, Volanty, SouSmile
• Key exits: Creditoo, Decorati, Teravoz
• Latest investment: Undisclosed seed round in Rapicare on June 15, 2020

Valor Capital

VCs are an ecosystem onto themselves. Indeed, their diversity allows for different focuses, like Valor Capital. Sure, it is an investment firm focused on Brazil, but it also looks to stimulate US-Brazil cross-border opportunities.

Fittingly, Valor has offices in New York and Silicon Valley, as well as Rio de Janeiro and São Paulo. 

Beyond its two geographic focuses, the firm operates across two investment strategies: Growth Equity and Venture Capital. 

Portfolio Cheat Sheet:

• Total startup investments: 52; of which 35 are from Latam; of which 33 are from Brazil
• Notable startups: Loft, Gympass, Docket, Guiabolso, Cobli, Tembici
• Key exits: Scup, Sieve, Stone
• Latest investment: Series B worth US$47 million in TemBici on June 3, 2020

Astella Investimentos

2008 may not feel that distant, but if you’re a VC that makes you an old hand. Indeed, Astella prides itself on being a venture capital pioneer, with an initial fund consisting of 11 investments and four successful exits (Ciatech, Portal Educacao, Navegg, and Dualtech).

Fund 2 came in 2014 with 7 investments, with two very successful “home-runs” still on its portfolio: Omie and Resultados Digitais. Fund 3 is from 2017 and has 12 companies on its portfolio, and now in 2020, Astella has started the allocation of fund 4.

The secret sauce? Well, the VC pins it to the fact that they are self-proclaimed value investors, meaning that they develop a strong portfolio with companies with great unit economics.

Portfolio Cheat Sheet:

• Total startup investments: 30; of which 30 are from Latam; of which 30 are from Brazil
• Notable startups: Omie, Resultados Digitais, Sallve, Kenoby
• Key exits: Ciatech, PortalEducacao, Dualtech, Navegg
• Latest investment: Undisclosed seed round in Grão on January 17, 2020

KPTL

KPTL is a double whammy; the merger of VCs A5 Capital Partners and Inseed Investimentos. The fusion made this investor a giant in the industry, becoming the largest venture capital firm for funds domiciled in Brazil from its very birth.

It has 46 investees, assets under management of near R$1 billion (almost US$200 million). They have six offices spread across Brazil, from Manaus to Porto Alegre, as well as a base in the United States.  

Portfolio Cheat Sheet:

• Total startup investments: 56; of which 56 are from Latam; of which 56 are from Brazil
• Notable startups: NeuroUP, Justto, Cowmed, Colab
• Key exits: Clickon, GrupoRPH, Arvus, GeoFusion, AmazonDreams.
• Latest investment: Undisclosed seed round in RankMyApp on April 13, 2020

Confrapar

There’s a wonderful balance in the Brazilian ecosystem reflected in its VCs, and in Confrapar specifically. As a fund manager, its banks very heavily on its native country’s market, but when it expands, it goes big.

Indeed, Confrapar has extended its wings across the Atlantic and is an investor in the UK’s OxisEnergy.

But diversification can be found within as well. This VC’s shareholders are investors distributed among different segments: technology, media, and telecommunications. Among the quota, holders are family offices, corporate ventures, funds of funds, banks, and Brazilian and foreign development agencies.

Portfolio Cheat Sheet:

• Total startup investments: 23; of which 22 are from Latam; of which 22 are from Brazil
• Notable startups: Ingresse, Hands, UBook, HelpSaudé
• Key exits: SalaryFits, Flapper
• Latest investment: Investment worth R$20 million (US$3.9 million) in Salaryfits on December 19, 2019

Redpoint eVentures

This VC is a good example of how deeply interested the world is in Brazil’s ecosystem. Redpoint eVentures is the Brazilian arm of a partnership stemming from prominent US-based firms Redpoint Ventures and e.ventures.

The combination is a winning one. Redpoint eVentures’s Brazil-exclusive focus allows it to center on bringing funding, Silicon Valley access, and global best practices to promising startups in the country. 

In fact, the VC remarks that its focus is country-wise since, in addition to serving the companies in its portfolio, the fund’s team contributes to the development of the growing entrepreneurial ecosystem in Brazil. 

Portfolio Cheat Sheet:

• Total startup investments: 44; of which 44 are from Latam; of which 44 are from Brazil
• Notable startups: Creditas, Vittude, BovControl, Rappi, Pipefy, Housi, Gympass, Escale
• Key exits: Branchout, Pathmobile
• Latest investment: Seed 2 round worth US$2.3 million in Arena on June 17, 2020

Bossa Nova Investimentos

The more the merrier, says the very Brazilianly named Bossa Nova, a VC focused on seed-stage technology companies. 

Bossa Nova focuses on B2B startups and likes companies that have a SaaS and/or Mobile focus. But what they really like is sheer numbers. They reportedly have over 512 investments (I’d imagine that involves a good amount of bridge loans to their existing portfolios).

Its team is made up of entrepreneurs who have either exited or scaled technology companies before, giving them the necessary perspective to understand what it takes to start and grow a business. 

Portfolio Cheat Sheet:

• Total startup investments: 106; of which 106 are from Latam; of which 106 are from Brazil
• Notable startups: SMU Investimentos, Resolvvi, PhishX, Justto, Hand Talk
• Key exits: dLieve
• Latest investment: Vai.Car’s Venture round worth US$85M on March 2, 2020

Maya Capital

Maya Capital is a seed-stage venture firm that supports businesses generating accessibility, transformation, and efficiency in Brazil and Latin America.

They look to back bold entrepreneurs leading disruptive ventures with smart capital and best-in-class advisory. But don’t take “smart” capital to mean “small capital”, since their investments fall overwhelmingly within the capital intuitive sectors of proptech (21 percent of their portfolio), finance and logistics (both with 15 percent).

Portfolio Cheat Sheet:

• Total startup investments: 19; of which 19 are from Latam; of which 13 are from Brazil
• Notable startups: NotCo, Kovi, Trybe, Gupy, EmCasa
• Key exits: None
• Latest investment: Seed round worth $US5.3 million in Nuvocargo on April 23, 2020

VC Honorable Mentions

• SP Ventures
• Ace Startups
• ONEVC
• Invest Tech
• Duxx Investimentos
• DNA Capital
• Barn Investimentos
• Domo Invest
• Honey Island Capital
• GooDz Capital
• BRQ Digital Solutions
• Leblon Equities
• Garan Ventures
• KICK Ventures
• Neuron Ventures
• RedLions Capital
• InovaBra Ventures
• Crescera Investimentos
• Mindset Ventures
• Chromo Invest
• Criatec
• Domo Invest
• Indicator Capital
• TM3 Capital
• DNA Capital
• Performa Investimentos
• Triple Seven Investments
• Go4IT Capital
• Ideiasnet
• Polaris Investimentos
• BzPlan
• ArpexCapital
• Base Partners
• Kria
• Iporanga Ventures
• Bolt Ventures
• Pitanga Fund
• Caravela Capital
• Capital Lab Ventures
• Varejo Ventures
• Darwin Capital
• Oria Capital

And, hey, if your favorite wasn’t on here it doesn’t mean we don’t care. It means it ain’t in our database. Drop me a line at [email protected], and we’ll fix it.

The rest of the VC ecosystem

Venture Capital funds hoard most of the attention, but one cannot forget the essential role played by the other investors in the VC ecosystem.

Accelerators, individual investors—commonly known as, “angels”—, and corporate VCs fill their own niches and play significant and specialized roles.

Indeed, often these categories overlap, with angels dipping in and out of funds depending on their specific needs, accelerators passing on successful startups onto partnered VCs, or corporate actors running their own in-house accelerators.

The diversity of focus, sizes, and shapes are a testament to the myriad of opportunities to be found in Brazil. Niches within niches, if you will.

Accelerators

Wait, aren’t accelerators, well, accelerators? Why are they in an Ultimate VC guide? 

It is true that the main purpose behind an accelerator is to prime and prepare a fledgling startup to maximize its potential and grow. In Brazil, that usually takes place over the course of between three to six months on average. 

However, on graduation, startups can expect to gain access to money in order to go on and actually fulfill their vision. This is in fact a key differentiating factor between accelerators and business incubators:

A seed investment in the startups is usually made, in exchange for equity, preferential contact with VCs, or straight-up cash post-acceleration.

But why go through all the trouble of going through an accelerator?

The key is to have a great idea worth investing in, then an accelerator will boost it and make it a bigger and better reality than it was on paper.

Accelerators in Brazil

The Brazilian case is illustrative. At the time of application to an accelerator, less than half of Brazilian startups had earned revenue or had hired employees, and an even smaller portion had raised investment. 

Source: Global Accelerator Learning Initiative (2019)

By the end, the results are clear for all to see: Brazilian ventures, once accelerated, were likelier to have better revenue, as well as more employees and investment than those with no prior acceleration. 

However, Brazil, like the rest of Latin America, has a long way to go when it comes to certain challenges.

Take gender parity. Only 38 percent of ventures that applied to accelerators included women on the founding team. Break down the numbers and it looks even worse: 62 percent of startups were all male, 27 percent mixed, and 11 percent all female.

But, this isn’t about parity for the sake of parity (though that would be good as well). Woman-inclusive founding teams make more financial sense, as these were more likely to report having raised revenue upon applying to an accelerator. They’re doing something right!

The top, most accelerated sectors in Brazil broadly reflect the rest of Latam’s trends. Information and communication technologies are the head of the pack, followed by education and health.

Accelerators Honorable Mentions

• Ace Startups
• Darwin Startups
• Wow Accelerator
• Ventiur Aceleradora
• Cotidiano
• 21212
• FCJ Belo Horizonte
• Startup Farm
• Baita Accelerator
• The Jump Brazil
• Acelera Partners
• HARDS
• Liga Ventures
• OBr.global
• Gema Ventures
• Sevna Startups
• Spin Capital
• Rede Entropia
• Syndreams Aceleradora

Angel Investors (individuals)

Individual investors are the unsung heroes of the VC world. They often prefer to keep to themselves and let the bigger VC funds toot their own marketing horn.

However, private individuals really hit their stride in Brazil after a 2016 law brought the term “angel investors” out of the darkness and into official legislation. The move provided angels with the legal assurances they needed in what is, by definition, a risky capital venture. 

Suddenly, over 6,000 people were covered by a law that homogenized a patchwork of local regulations into some of the best international practices.

The law brought various improvements, but amongst the best was the fact that it determines that angel investors shall not be partners of, or answer for the liabilities concerning, the companies they invest in. 

The legislation also set up a maximum investment span of seven years, and investors’ payout may not exceed 50 percent of a startup’s profits.

Angel Investor Honorable Mentions

• Camila Farani
• Leonardo Teixeira
• Romero Rodrigues
• Diego Gomes
• David Velez
• Florian Hagenbuch
• Ariel Arrieta
• Mauricio Feldman
• Rodrigo Dantas
• Joao Kepler Braga
• João Ventura
• Igor Macedo Montalvão
• Silvio Genesini
• Sergio Furio
• Eduardo Brennand Campos
• Fernando Gadotti
• Mario Letelier
• Patrick Sigrist
• Olivier Grinda
• Kai Schoppen
• Guilherme Bonifacio
• Paulo Silveira

Corporate Venture Capital (CVC)

Last but not least are the corporate venture capital investors of Brazil. A lot of us in the startup ecosystem write as if the “old economy” were completely out of touch with the realities of innovation. This is clearly not the case, and corporate VCs are a case in point.

The whole purpose behind these investors is for companies with capital in the bank to invest in the most innovative startups. Sure, they may make a buck, but it’s really a brilliant way for a corporation to keep its finger on the pulse and its sights on juicy new solutions.

Why invest in a very expensive R&D department when you can outsource it? And if the startup solution you’ve invested in as a company hits the innovation jackpot, well, you’re a shoe into the acquihire! 

This is why corporate venture funds tend to stick to their vertical, sector, or relevant tech. Like Axon Ventures from pharmaceutical company Eurofarma, which invests in healthcare; or Construtech Ventures from SoftPlan Systems, a real estate software company investing in proptech.

Then again, the beauty of innovation is you never know what revolution in what sector might just overhaul your own industry. This is why multi-national bank Itaú keeps its investments in and around fintech, but also energy tech.

This also explains why startups usually shouldn’t expect corporate capital until they’re a few rounds deep into their venture with a clearly workable MVP.

However, in 2017, nearly a sixth of the early-stage tech companies that had received more than US$1 million in funding over at least two rounds, secured corporate venture capital funding.

Corporate VC Honorable Mentions

• 100 Open Startups
• Sebrae
• CUBO
• Bradesco
• Eretz.bio
• Apex
• Porto Seguro Capital
• Hospital Albert Einstein
• Construtech Ventures
• Embraer
• Itaú

Related articles: Tech and startups from Brazil!

-AG, SB

Research and data by Salvador Betancourt-Ramírez with source material obtained through correspondence with the VCs or, upon non-response, cited from the funds’ websites.