Even with all the problems faced during 2020 and 2021, Brazil is expected to emerge from this period as a fertile ground for startups and investors. With the acceleration of business digitalization last year – fruit of the pandemic –, we saw more than one startup being born each day, many of them with exceptional teams, that offer solutions to problems that are unique to our country. And, along with companies, investors are also much more active seeking new opportunities.
Invest Tech is a Brazil Digital B2B investor since 2008, specializing in investing in the companies that are digitizing the businesses among companies. With a focused strategy in investing in companies that streamline the performance or that operate within the Telecom, Health, Education and Financial industries, Invest Tech has a solid position in the Brazilian market investing in startups and growth opportunities.
Startups focused on finance, retail, health care and education drew the attention of investors. Since 2016, the amounts invested in these companies have grown significantly, reaching, in 2020, a peak of R$ 19.7 billion, according to data from Abstartups (Brazilian Startup Association).
And, apparently, the rhythm is steady this year. The Inside Venture Capital report shows that, in the first months of 2021, Brazilian startups received around R$ 16.2 billion in investments, or 90 percent of the total invested last year. Until May, 261 contributions were made and, even when we deduct giant injections made in Nubank (US$ 400 million), Loft (US$ 525 million) and Quinto Andar (US$ 300 million), the amounts reached records when compared to the last five years. If things go on like that, we will probably close this year with over US$ 5 billion invested in startups.
With a focused strategy in investing in companies that streamline the performance or that operate within the Telecom, Health, Education and Financial industries, Invest Tech has a solid position in the Brazilian market investing in startups and growth opportunities
The fintechs have attracted most of these investments. These companies received 57 investments this year, amounting to US$ 1.158 billion, followed by real estate business startups, with US$ 825 million in investments. Another survey, from the Transactional Track Record (TTR), including large operations, shows that venture capital funds have already injected R$ 15.2 billion this year in technology companies in Brazil, from January to May, with 115 transactions.
The numbers also show that Brazil is becoming consolidated as an attractive market not only for local startups. The amounts invested here by investors, and the size of the local consumer market are also attractive to Latin American entrepreneurs that find here a market that is large enough to escalate their businesses and justify new investments. There are many examples of this movement, like fintechs Addi and Clara, the car sales startup Kavak, and Bitso, a cryptocurrency broker. There are even interesting cases of companies that started operating simultaneously in Brazil and Mexico, like Casai and Merama.
This startup attraction to the Brazilian market has a reason. Brazil today counts on a consumer market with over 200 million people and is the largest economy in Latin America with a GDP of R$ 7.4 trillion. Aren’t they good reasons?
