Brazil’s economy experienced ups and downs over the past decade. Almost immediately after Forbes published an article raving about Brazil’s entrepreneurial potential in 2012, Brazil entered one of the most disastrous economic crises in the region. Just this year, stories of political corruption, monetary deflation, and falling commodity prices have plagued Latin America’s largest country.
Brazil is a country of contradictions. In the first three months of 2018, Brazil produced three new startup unicorns. The first was 99, acquired by Didi Chuxing for a rumored US$1B. Then in quick succession, PagSeguro reached US$2.7B in its January 2018 IPO (the 5th highest IPO ever), and Nubank became the third unicorn of 2018 with a US$150M Series E round in March 2018.
As the largest market in Latin America, with a population of over 210 million people, Brazil is still the most attractive country for investment and growth in the region for many investors. Despite the economic downturn, international investors often look to Brazil first when they want to enter the Latin American market. Many tech giants, such as Google, Uber, Airbnb, and Amazon, have built offices in São Paulo before moving into other Latin American markets. Many entrepreneurs look to invest in Brazil for their long-term growth strategies, as well.
According to LAVCA’s latest State of the Industry Report, Latin American startups received a total of USD$500M in all of 2016. In just the first 6 months of 2017, they received USD$477M.
It is clear that Latin America is experiencing a substantial uptick in venture capital activity. For one, Series C rounds in Latin America totaled USD$314M for the first half of 2017, compared to USD$208M raised in all of 2016.
Additionally, the investments in 99, Brazil’s largest rideshare service, by Didi, China’s largest ridesharing company, represented two of the top three largest investment rounds of all time in Latin America.
The report also uncovered that 93% of the funding that Latin American startups received this year in VC funding went to the IT sector. This is almost triple the amount that was invested in the fiscal year 2016 through the same number of deals.
Image Source: LAVCA
This post is the fifth in a series about Latin American venture capital ecosystems. Read Chile, Colombia, Mexico and Peru.
I recently wrote about the growing business opportunities in Brazil, the fifth largest country in the world and home to one of the most tech-savvy populations in Latin America. Despite the recent political turbulence and recession, Brazilian startups are still attracting plenty of attention from investors. New government initiatives and a growing interest from foreign investors are building momentum for Brazil’s entrepreneurial ecosystem.
If you’re an investor or seeking funding opportunities for your venture, below is a brief overview of the venture capital ecosystem in Brazil.
Anjos do Brasil – Anjos do Brasil is a nonprofit founded in 2011 to help further the development of angel investment in Brazil. The organization has over 16 affiliated groups and 350 members across the entire country.
Startup Angels – Startup Angels is an international network that inspires and enables angel investors worldwide, with an office in São Paulo, Brazil’s financial capital. (more…)