Corporate Venture Capital boosts the Brazilian startup ecosystem with R $10 billion investment

The landscape for Brazilian startups is undergoing a significant transformation thanks to the surge in Corporate Venture Capital investments.
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Brazilian startups have raised more than R $10 billion in investments from Corporate Venture Capital (CVC). This milestone marks an exciting resurgence after a period of economic adjustment that decreased funding for growing startups. Now, the climate is significantly improving for these companies.

From 2020 to 2021, global investments in CVC, whose acronym is unrelated to the travel agency, more than doubled after a year of reduced contributions due to the pandemic. In 2021, the world record for venture capital investments was broken, reaching a total of USD $169 billion, according to data from the “State of CVC” report by CB Insights.

Brazil did not lag in this record-breaking investment wave, and it is estimated that around USD $10 billion has been allocated to domestic startups, accounting for half of all activity in Latin America in this sector.

Given the many investments that can be considered risky due to the longevity and challenges of the market for growing startups, the Brazilian Association of Corporate Venture Capital (ABCVC) was created. Leo Monte, Innovation Director of Sinqia (SQIA3) and CEO of Torq (TORQ) was chosen as the association’s president.

Monte expressed his commitment to the development of the Corporate Venture Capital ecosystem in Brazil:

“We face constant challenges when it comes to Corporate Venture. Our goal for this term is to energize the ecosystem and support the growth of activity, offering support to corporations from different sectors looking for investments and innovation. Furthermore, we are building alliances and collaborations with other initiatives with adjacent activities.”

The association has a series of critical activities, including generating and disseminating technical knowledge related to innovation management and corporate venture capital investments, supporting the emergence and consolidation of new corporate innovation models, organizing and promoting periodic events, and advocating for the importance of diversity in corporate governance and innovation management positions.

In addition, ABCVC has created committees with mentors and experts to discuss topics related to “investments, open innovation, venture builders, and innovation culture.”

A promising future for Brazilian startups

Investments in startups allow large corporations to access new products and services offered by these emerging companies with fewer barriers. In this regard, of the R $10 billion invested, CVC programs have already invested in 20% of Brazil’s unicorns this year, with the participation of prominent tech startups, banks, accelerators, and investment funds.

These investments not only drive the growth of startups but also generate solid results that revitalize the overall business market. In comparison, investments from traditional venture capital funds, where investment managers make disconnected capital injections into companies, increased by 16% in the third quarter of this year, reaching R $1.9 billion.

On the other hand, during the same period, R $800 million has been invested in CVC, with executives from large companies interested in acquiring startups and negotiating the checks.

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