Private Equity and Venture Capital

Made in Brazil

Amsterdam, March 20th 2021–Opportunities for Private Equity and Venture Capital in Brazil have picked up since 2011. The dynamism of the segment relates to the growing amount of capital committed for investments in the country, which increased significantly over a 6-year period, as well as an increasing gross payout to investors, according to ABVCAP, the Brazilian Association of Private Equity and Venture Capital.

In 2017, investments in the private equity and venture capital industry in Brazil reached BRL 15.2 billion (USD 4.2 billion), which represented a 35% growth compared to BRL 11.3 billion (USD 3.1 billion) in 2016. The capital distributed to investors showed a significant growth in 2017, of 11.3% in relation to the amount distributed in the previous year.

Sectors which received most of the Private Equity and Venture Capital

Considering the local private equity activity, the sectors that received most investments include Education (15%), Infrastructure (21%), and Energy (13%). Moving to the analysis of venture capital activity, the number of VC transactions in Latin America, according to the Latin America Venture Capital Association (LAVCA), reached its record in 2017, since the beginning of data collection in 1993. There were 249 transactions recorded, 52 more than in the previous year. Brazil continues to be the largest VC market in the region, in terms of volume invested: USD 859 million, representing 48.4% of the total invested in the region, through 113 transactions.

Innovative StartUps attract Venture Capital

From 2016 to the first quarter of 2018, the Brazilian venture capital scene finally produced its first 3 unicorns, technology companies worth a billion dollars. They are 99, Pag Seguro and Nubank. More recently, Loggi, GymPass, Movile, Stone and Ifood have joined the hall. Market experts also have good prospects for others, such as Guia Bolso, Quinto Andar, TruckPad, PSafe, Neoway, Neon, Cargo X, Creditas and Yellow. Corporate venturing is also increasing its interaction with the Innovation and Investment ecosystems, with Brazilian giant corps such as EMBRAER, Bradesco, BR Malls, BRF, Dasa, Eurofarma, Stefanini, the Albert Einstein Hospital, Algar Group, BMG, Softplan and others, investing more in startups and funds. There are also global corporations doing the same, such as Microsoft, Monsanto, Syngenta, Qualcomm, EDP, UPS, Baidu, just to mention some.

Promising Food and Beverage industries attract investments

Most recently, Agribusiness, Food and Beverage industries have proven to be one of the most promising sectors for the coming years, especially because of Brazil’s global role as a major supplier of food and other farm products. In addition to the improvements in productivity, Brazil is also one of the few countries in the world with the capacity to increase its planted area. Market size, technological advances, and investments in food security have placed the country as a market leader. Specifically, the field of technology in agribusiness has been a notable area of potential for investments, according to the ABVCAP. Entrepreneurial activity is rising on mobility, health and fintech – each segment counting with more than 400 companies developing technology solutions for the market.

The Private Equity & Venture Capital in Brazil program

In 2009, the Private Equity & Venture Capital in Brazil program was created as a joint initiative between the ABVCAP and the Brazilian Trade and Investment Promotion Agency (Apex-Brasil), in order to connect international investors and Brazilian fund managers and companies. This far, the project’s networking tools have helped Brazilian funds raise more than USD 16 billion abroad. The program offers multiple opportunities for both global investors and local fund managers, having connected over 60 fund managers in Brazil with more than 250 global institutional investors seeking the region. 

af Amsterdam March 20th 2021

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