VENTURE CAPITAL AND PRIVATE EQUITY IN BRAZIL
Brazil's tech ecosystem is scaling at an unprecedented rate, with the country's startups raising $3.2 billion in funding in the first five months this year, which represents 90% of the funding in all of 2020.
Opportunities for Private Equity and Venture Capital in Brazil have picked up since 2011. The segment's dynamism is related to the growing amount of capital committed for investments in the country. The volume has significantly increased over a 9-year period, as well as an increasing gross payout to investors according to ABVCAP, the Brazilian Association of Private Equity and Venture Capital.
Since 2009, ABVCAP and Apex-Brasil have linked international investors to Brazilian fund managers and companies.
Considering regional venture capital performance in Latin America by managers, angels and corporates, Brazil has represented 50.5% of the deals made in the region followed by Mexico with 22.7% and Chile with 9.1%. According to the Latin America Venture Capital Association (LAVCA) US$2.49 billion was invested on 222 deals In the Brazilian venture capital side of the industry. In 2019 this amount was US$1.3 billion representing an increase of 91.53%.
Considering the invested industries by amount, LAVCA reports Fintechs, Logistics and Proptechs as the top three industries. Based on the number of deals; Fintechs, Healthtechs and Proptechs are the top performers followed by SAAS, e-commerce and Edtechs.
Brazil has more than 220 active Fund Managers.
From 2016-2021 Brazil was able to deliver 18 unicorns.
There are more than 20,000 Startups – outstanding opportunities in Fintech, Healthtech, Advanced Manufacturing and Agtech.
In 2020 the average private equity ticket for a company was R$115 million while venture capital average ticket was R$70 million.
66% of the capital committed in the Brazilian PE / VC industry in 2020 comes from international investors, an increase of 24.52% considering 2016 share and 34.69% considering 2012 levels.
Exits activities are also increasing and proving the industry maturity. While 2011 registered R$3.6 billion in exits, In 2019 that amount reached R$20.9 billion representing an increase of over 300%.
Apex-Brasil has supported international investors to commit more than US$18 billion to local companies.
Back in 2011, the year that the mapping of start-ups began to be delivered to the market by the Brazilian Association of Startups (ABSTartups) there were 4,000 companies in Brazil. The community has kept growing through the years reaching 10,000 companies in 2017. Now the number of new companies is still growing and has exceeded 20,000.
Several industry focused mappings have been produced and published recently, especially oriented to promising sectors such as Agritechs, Fintechs, Mobility, Cosntrutechs and others.
Considering the mapped areas of interest, companies are offering solutions to these following top five fields: EdTechs, FinTechs, HealthTechs, AgriTechs and RetailTechs.
The top 10 locations where these start-ups are: the city of São Paulo ranks 1st with 45% of the companies, followed by Rio de Janeiro (12%), Belo Horizonte (10%), Porto Alegre (9%) and Curitiba (6%). Other ranked cities present shares ranging from 4% to 3% and are Florianópolis, Brasília, Salvador, Recife and Fortaleza.
Regarding the activity of Private Equity and Venture Capital, Apex-Brasil facilitates the connection between International Limited Partners (LPs) and General Partners (GPs) to Brazilian funds and Innovative companies. The Agency also support corporations and their venture capital approach through matchmaking and special projects. In regards to corporate venturing, a major trend in Brazil, at least 150 corporations are playing an increasing role in supporting entrepreneurs by providing liquidity and fostering high-tech deals.
Since 2010, Apex-Brasil and ABVCAP have supported over USD18 Billion to be fundraised by Brazilian funds managers and more than USD 330 Million from international Corporate Venturing Funds (CVCs) on direct deals and funds.
The Agency works closely with 300+ financial investors monitoring their thesis and advising matchmaking opportunities through its projects and promotional calendar every year. Besides connecting financial investors to opportunities, most recently Apex-Brasil is promoting investments to develop new technologies and foster innovation.
For more details please visit: www.apexbrasil.com.br