DOMO Invest shows up to 20 B2B startups some love with its newest fund

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Contxto – Brazilian venture capital (VC) firm DOMO Invest announced the launch of a new investment vehicle called “DOMO Enterprise” last week. Its name is a slight giveaway as to whom the fund addresses: business to business (B2B) startups.

The peeps at DOMO expect it to hold somewhere between R$150 million to R$200 million (US$27 million to US$36 million) to be dispersed among up to 20 startups as seed investments.

Tickets will range at around R$3 million to R$5 million (US$540,000 to US$905,000). Moreover, according to Pequenas Empresas, it’s already raised 30 percent of its target fund size.

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The motives as to why DOMO decided to launch this fund are both interesting and also reveal the growing maturity of the VC scene in Brazil.

3 reasons why DOMO did what it did

This Brazilian VC has been investing since 2016. During that time it has identified changes and new demands within the startup ecosystem. DOMO cited three specific challenges that led it to create this fund in particular.

First off because each business model (B2B, B2C, B2B2C) has varying requirements. As a result, it’s not necessarily best for them to be lumped together to receive “all-encompassing” guidance and funding.

“We have different theses for different entrepreneurs. B2B companies have other cash needs,” stated Marcello Gonçalves, one of DOMO’s founders.

“B2B operates through a longer sales cycle and less customer withdrawal. Therefore, it may need more capital to sustain itself until the next fundraising with investors.”

Likewise, the VC also argues that as more consumer-facing startups emerge, so do their needs for other startups to attend. Consequently, it wants to contribute to this process through a fund and a specific set of B2B portfolio companies.

Lastly, DOMO states that the rise of corporate venture firms is leading to third party companies interested in finding and investing in startups that offer them viable solutions.

This particular case illustrates that VCs in Brazil are extending their investment scope to cover more ground.

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-ML