Monday, July 18, 2011

Meet the Locals - Brazil's Homegrown VC/Growth Community

In my last post we looked at the recent, significant investments by US venture and growth funds in Brazil. But Brazilians are not letting Americans have all the fun. Local investors have deep experience (some obtained abroad) in the industry, an understanding of the culture and insights into potential regulatory hurdles.

In the latest data I was able to find from late 2010, the VC community has approximately $1.9bn assets under management. To put it in perspective, this is smaller in the aggregate than many of the largest US VC funds individually. Nonetheless, when making mostly <$40mm investments, it can go a long way.

Below I highlight several firms that any investor/entrepreneur entering the region should know.

  • A hybrid US/local firm. FIR Capital has existed since 1999 but in 2007 one of the largest US venture firms, Draper Fisher Jurvetson, acquired a significant stake and the name changed to DFJ FIR. 
  • Successful investments have included insulin maker BioBras which was acquired by NovoNordisk in 2002 and search engine Akwan which was acquired by Google in 2005 (interestingly only its second acquisition outside of the US at the time, also created something of a tech hub out of Belo Horizonte) 
Monashees Capital
  • Founded in 2005 by veterans of the US venture capital and growth equity industry. Focuses on internet and educational businesses
  • Recent investments have included (some highlighted in previous post) Peixe Urbano, boo-box, (an online retailer to mothers which is especially interesting now since US investors have seen prosper in a previously difficult, low-margin business) and IKWA (a social networking educational platform) 
Stratus Group
  • Growth/buyout firm in middle market founded in 1999 by veterans of Brazil’s private equity industry. Focused mostly on technology and cleantech though self-described as sector agnostic. 
  • Especially notable recent investments include Amyris (a biomass conversion firm with operations in Brazil which listed in late 2010 on the NASDAQ to much fanfare, other holders include big-name firms like Kleiner Perkins and TPG) and Alog (a Brazilian data center provider acquired by US data center firm Equinix in 2011) 
  • A TMT (tech, media, telecom) investing firm first publicly listed in 2000. Included on the team is Michael Nicklas, one of the best-connected people in Brazil's technology community. 
  • Their portfolio includes a number of telecom infrastructure players in addition to Spring Wireless (mentioned in previous post). The earlier stage investments including Bolsa de Mulher (largest women’s online portal in Brazil) and the Brazil Netflix equivalent, NetMovies
  • Has early stage funds designed to make investments out of specific regions including Minas Gerais and Rio de Janeiro (both under 50mm reais) 
  • Notable investments include Via6 (a Linkedin mixed with equivalent) 
Astella Investimentos
  • Early stage investments 
  • Portfolio includes Dualtec (a cloud brokerage service) and HelpSaude (an online doctors directory) 
  • A fund developed with the national development bank to seed early stage companies. Investments up to $1.5mm reais
  • Portfolio includes medical, technology and agriculture companies 
As with the last post, this list is not intended to be comprehensive.

Am I leaving any of the major local players out of this profile?  Technology and healthcare are well-represented here.  I haven't seen much of e-commerce/retail - will this be the next sector of interest?

P.S. I just realized tonight (b/c I'm, well, taken) that the super-nice niece of my host mother who has been eating dinner with us every night is actually one of the top emerging models in Brazil.  Let's be honest, Brazil is much better known for its beautiful people than its tech scene.  Here's a link to her recent photo shoot. 

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