Saturday, July 16, 2011

Welcome - What's Happening in Brazil?

I'm in Brazil learning Portuguese because of the 'oportunidades'.  This country is mixing its market democracy with a growing consumer class, widespread internet connectivity, relatively stable macro indicators and increasingly liquid capital markets - a recipe for a powerful jolt of growth.  I have spent the last two years at Goldman Sachs raising equity for venture-backed companies in the private markets.  Increasingly, our investor friends expressed an interest in emerging economies; I'm here to share in their search for the region's opportunities.

This blog is designed for those, like me, who want to quickly get smart on Brazilian early stage companies in the technology and alternative energy sectors - and the venture capital and growth equity investors who are helping make their growth happen.  It's not designed for those who are looking for the latest news on every startup in Brazil.  For that, you should follow Startupi or ReadWriteWeb

The startup community here has been dubbed Brazilicon Valley, so it seem appropriate for me to begin by giving an overview of some transactions by Silicon Valley firms that have recently made waves in the press.  

Peixe Urbano (Urban Fish)
  • Group buying site offering discounts similar to Groupon and Living Social founded in March 2010
  • Scored investments from Benchmark Capital and Brazilian venture firm, Monashees Capital in late 2010 and a May 2011 round from hedge fund Tiger Global Management and growth-equity firm General Atlantic
  • Sao Paulo-based social gaming operator originally designed for Orkut (the Google-owned, LatAm Facebook equivalent, colloquially pronounced "Or-koo-chee").  They have since spread to more platforms including Facebook.  Recently in hot water for allegedly copying Zynga's games. Co-founded by a guy who was in Goldman training with me, Joshua Kushner
  • Raised a $30mm round in late 2010 with Accel Partners, General Catalyst, Tiger Global and Intel Capital at a $300mm valuation.
  • Sao Paulo-based online travel booking site competing with outside firms like Expedia and local firms like Decolar
  • Raised a $19 million round from Redpoint Ventures and General Catalyst in May 2011
  • Sao Paulo-based Spring Wireless offers enterprise mobile applications, including banking and payment systems, ads, coupons, and entertainment products like quizzes and polls. Clients include P&G, Cisco and Citibank, among others.
  • Raised a $66mm round in 2008 with NEA, Goldman Sachs and Ideiasnet, a Brazilian publicly-traded venture capital firm
  • Raised a $12mm round in May 2010 led by SAP Ventures and including previous investors NEA and Goldman Sachs
Boo Box
  • Sao Paulo-based advertising system for social media.  Brazilians are heavy users of social media (highest global % of internet population on social networking at 95%) so advertising to them has attracted outside attention.
  • Raised an undisclosed amount from Monashees Capital and Intel Capital in November 2010

This list is not intended to be comprehensive.  It is only intended to show that there are real dollars and sophisticated investors playing in Brazil.  In my next post I plan to profile the local VC and growth equity firms that are making big impacts (you got a taste of that above).  Stay tuned!

What other investments are making press waves?   What do you think is the next sector to attract US investor attention?  

P.S. This morning I rescued some newspapers at my host family's home from the kitty litter pile. The top page lead story is that the Brazilian bank Bradesco just passed Goldman Sachs to become the 6th largest bank in the Western Hemisphere by market cap (for non-finance types, the aggregate value of a company's outstanding shares).

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