糖心视频

As South America鈥檚 largest country, Brazil has the potential to be an economic powerhouse. But over time, political turmoil, largely as a result of corruption, has marred the economic landscape.

Still, despite the political upheaval in recent years, the country鈥檚 startup scene has seen some serious acceleration, reflecting a general trend we鈥檙e seeing in Latin America as a whole (read more about that here.)

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According to , the Association for Private Capital Investment in Latin America, venture funding in Brazil exploded in 2018 to $1.3 billion, representing nearly two-thirds of all venture money raised in Latin America as a whole last year. That鈥檚 52 percent more than the $859 million invested in 2017, and a staggering 369 percent increase from the $279 million raised in 2016, as you can see in the chart below.

Meanwhile, deal volume more than doubled to 259 in 2018 compared to 113 in 2017. Further, VC deals in Brazil made up nine of the 14 top deals in all of Latin America by amount, and represented 66.2 percent of all dollars raised last year, according to LAVCA, as evidenced in the below chart, rendered in the colors of Brazil’s flag.

, director of venture capital at LAVCA, believes it鈥檚 important to note that while 鈥渢he new and big rounds are driving the news, VC investment is up across all stages in Brazil and LatAm.鈥�

鈥淎ll stages broke records in terms of deals and dollars in Brazil last year,鈥� she told Crunchbase News.

Some of 2018鈥檚 biggest deals included Brazilian fintech startup raising $150 million and then $180 million from , , and others. Also last year, Sao Paulo-based raised a of financing for , led by , with participation from .

Increasing Outside Interest

In March, we reported that (SBG) had unveiled plans for , or what it described as 鈥渢he largest-ever technology fund focused exclusively on the fast-growing Latin American market.鈥� Brazil is, naturally, expected to benefit. But overall, more global investors are participating in venture rounds raised by Brazilian startups, mirroring the trend we鈥檙e seeing in all of Latin America.

Last month, we interviewed Sao Paulo-based , which was founded in 2013 by , CEO, and , CTO. The company was founded out of Braga鈥檚 personal 鈥渘ightmare鈥� of an experience in renting an apartment in Sao Paulo. Over time, QuintoAndar has raised a total of about $93 million in venture funding from the likes of , and . Along the way, Braga acknowledged that some U.S.-based investors liked the premise behind the company, but were at first intimidated by the complexities of investing in Brazil, such as the exchange rate risk and a turbulent political, and uncertain economic, environment.

Here are some examples of significant venture fundings out of Brazil that have taken place this year, which is also starting out strong.

• Real estate startup raised a , at a valuation of about $370 million, co-led by and , with participation from and others.
• Mexico-based scooter startup and Sao Paulo-based jointly raised $150 million and merged to form in Latin America, only a few months after Grin acquired in Brazil.
• According to undisclosed sources, as cited by LAVCA, SoftBank will lead a million (and up to $500 million investment in , a Brazilian B2B gym membership platform with global operations, at a reported valuation of $1.1 billion.

Investors Weigh In

, a vice president at has long been bullish on the region, with his firm having invested in 14 companies in Latin America over the past decade. His firm recently led Sao Paulo-based fintech startup s $20 million series B. Riverwood has also invested in Brazilian ride-sharing startup and , a cloud computing company, among others. 99 went on to be acquired by China-based for $1 billion early last year in a deal that de Pinho聽noted 鈥渨as the first unicorn type exit of a tech company in Brazil.鈥�

, co-founding partner at Riverwood, also believes a lot of what is happening can be attributed to the fact that Brazil and Latin America are experiencing an acceleration in terms of technology adoption, with more than 400 million connected users and an increasing number of companies leveraging technology to grow and increase productivity.

鈥淣ew technologies are being leveraged to supplant and in some cases leap-frog lacking infrastructure,鈥� he said. 鈥淚n Brazil, Conductor is helping all sorts of companies offer digital payment services to consumers, 99 is filling gaps in urban mobility, Omie is helping SMBs run their financials on the cloud and access financial services, for example. It is exciting to see how technology can transform dozens of industries, and offer a new wave of economic development in the region.鈥�

San Francisco-based has invested in six Brazilian startups in recent years and plans to keep investing in the region. Portfolio companies include , , Meliuz, , Pitzi and Quiero Education.

In 2017, Lumia Capital shared that it was looking to invest in startups that were addressing a local market pain point in a way that might be overlooked by an outside party such as a larger U.S. firm going into the market, which has a 鈥渧ery large emerging middle class.鈥�

, founder and partner at Lumia, told me via email last week that 鈥渢here鈥檚 a good deal of excitement in the region at the moment鈥� thanks to a combination of things including 聽some strong public market tech exits, such as and , significant M&A activity such as 99 being acquired (as mentioned above) and a series of 鈥渦nicorn鈥� funding rounds such as raising more than $300 million total in 2018. The Sao Paulo-based fintech company was funded by prominent U.S. venture funds such as , 鈥渨hose presence in the market (along with others鈥�) has further contributed to the positive momentum,鈥� noted Gedalin.

鈥淢any capital allocators that had traditionally shied away from tech are eagerly planning and building out their tech investment strategies,鈥� he added. 鈥淧air this with the large amount of great entrepreneurs building interesting companies, many of whom are coming off of strong previous exits, and we think it will be an exciting next couple of years investing in Brazil.鈥�

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