2021

Venture Capital
in Brazil

1
 Founded in 2000, ABVCAP is a non-profit organization that represents the private
equity and venture capital industry and promotes the development of long-
term investments. ABVCAP has helped to improve industry conditions, advance
understanding about the industry and promote best practices that are aligned with
international industry standards. ABVCAP´s mission focus on development, sustainable
growth and market integration. In addition to expanding and improving the various
facets of long-term investment in Brazil, while keeping with international practices
(when applicable), ABVCAP’s mission emphasizes strategic integration in the capital
market, working to stimulate assets and companies traded on the stock market.

The Brazilian Trade and Investment Promotion Agency (Apex-Brasil) works to

promote Brazilian products and services abroad, and to attract foreign investment
to strategic sectors in Brazil. The Agency carries out several trade promotion
initiatives, such as commercial and prospective missions, business rounds, support
to the participation of Brazilian companies in major business fairs, and visits of
foreign buyers and opinion formers to assess the country’s productive structure.
Apex-Brasil also plays a key role in attracting foreign direct investment to Brazil,
working to detect business opportunities, promoting strategic events and providing
support to foreign investors interested in allocating resources in the country.

The InBrazil Private Equity & Venture Capital Program is a joint initiative between
ABVCAP and Apex-Brasil, set up to keep international investors well informed, linking
them up with Brazilian fund managers and portfolio companies.

FM/Derraik Advogados is one of the pioneers in the venture capital area in Brazil.
Members of their team were actively involved in the first wave of VC investments
in Brazil in the late 1990s and remain fully active nowadays. They represent private
equity, institutional and corporate venture capitalists, from Brazil and abroad.
They have handled numerous major transactions including some of the largest and
most sophisticated restructurings companies, M&As, fund formations and foreign
investments in Brazil.

2
 VENTURE CAPITAL
IN BRAZIL HAS
NEVER BEEN SO
IMPORTANT
ANDERSON THEES
Vice president, ABVCAP
Managing Partner, Redpoint eventures

The year of 2020 was an unprecedented challenge for all of

us, in all capacities. It was not different or the tech space
in general and for venture capital in particular. The results,
however, confirmed not only the opportunity ahead of us, as
we all believed before, but also the clear responsibility for the
value creation for society in the next years, as deals, valuations
and expectations have clearly settled. 2020 was one of the
most important years for the tech community globally, and a
groundbreaking moment for Latin America.

The number of deals in the region got close to 500, the highest since 2011, when the
data started to be monitored. Not only there were more deals, but also significantly
larger rounds. In Brazil, for the first time ever the volume of venture capital deals
surpassed that of private equity. In 2020, we also saw the debut of venture backed
startups in the local stock exchange, a new funding alternative for entrepreneurs
that will continue on in the following years.

3
 As the ecosystem matures and entrepreneurs get more and more sophisticated we
start to see the completion of the “flywheel” witnessing entrepreneurs become
investors themselves. Given the growing number of fund managers with solid invest-
ment thesis, the beginning local companies pursuing corporate venture strategies,
and new strategic investors joining the mix, the results we saw last year are likely to
be just the beginning. The massive opportunity set for the region and a well-func-
tioning ecosystem make up for an incredible building platform for entrepreneurs
leveraging creativity and innovation in the next years.

The COVID-19 pandemic has accelerated a lot the need for companies to become
more digital and more efficient while also acting responsibly towards society and
the environment. Those are new commitments that will generate gains for this and
future generations. The role of venture capital in Brazil has never been so important.
And we are nothing short of thrilled to be here now, and help make all this happen.

4
Industry Overview

This report aims to provide an overview of the Brazilian venture

capital industry. Through data, analyses and interviews with some
of the main players operating in Brazil, this publication outlines the
trends for the industry and offers prospects for the coming years.

This report aims to offer an overview of For the first time in Brazilian investment
the Brazilian industry of venture capital market records, investments made by
(VC) industry. The publication presents venture capital (VC) funds, which focus on
several perspectives on the sector’s start-ups as primary targets, surpassed
upcoming years through data, analyses, those made by private equity (PE) funds,
and talks with some of the most which hold a higher average ticket. Of the
prominent players in Brazil. BRL 23.6 billion raised by the industry in
2020, BRL 14.6 billion corresponded to VC
Many demands and questions arose and BRL 9.1 billion to PE.
in 2020 for which Brazilian society
and humanity needed to find answers. In the abundant innovation ecosystem
In the shadows of a pandemic, an that VC funds have fostered, two niches
unprecedented challenge in recent are worth noting. The first, of course,
history that by the beginning of March is health, made up of 27 of the 255
2021 killed over 2.5 million people companies that received backing in 2020.
worldwide, demand for innovation has Innovative solutions have been emerging
become higher than ever. to meet the needs of the Brazilian medical
sector at astonishing speeds; something
One of the countless immediate effects healthtechs have a lot to do with.
of the new coronavirus outbreak on the
economy has been the acceleration of the Another prominent niche is agtechs.
digitization process, which has put tech- Agriculture was the only one of the
based businesses and digital engagement three major sectors of the economy to
at the heart of citizens’ everyday lives have increased its positive effect on the
- companies which, of course, have Brazilian GDP in 2020, with record harvests
come to draw even more attention from and prices. Start-ups offering tech
investors. solutions to various agribusiness fronts
play a very strategic role in the Brazilian
economy,

5
 NUMBERS IN BRAZIL

Brazil’s VC data for 2019 and 2020 can be found below, it

has been gathered from the “Brazil 2020 Private Equity and
Venture Capital Industry Report”, produced by the ABVCAP
team, in collaboration with KPMG.

investments per year BRL billion

14.6

10.8

0.9

2017 2018 2019 2020

The Brazilian innovation ecosystem expands at a hastened pace. The proof is in the
consistency with which funding by VC companies has grown in recent years: even in
2020, a year ripe with tribulations, total investments by PE and VC funds reached
BRL23,6 billion, only 7% less than the BRL25.6 billion registered in 2019, a record.

These figures also demonstrate something novel, mainly regarding the number of
Brazil's investments in VC, which for the first time in history has surpassed PE: while
investments in VC totaled BRL 14.6 billion, PE's footprint was BRL 9.1 billion. What
drove the increase was the higher amount of companies receiving backing and the sig-
nificant increase in the average amount raised. The 200 companies that had VC firms
among their stakeholders received an average of BRL 71 million in funding.

6
amount of average investment BRL million

230 71
200

50 47
122
107

11

2017 2018 2019 2020

Number of companies Amount of average
invested investment BRL million

Tech start-ups, the main targets of VC funds, gained further attention from investors
by showing themselves as able to meet the demands brought about by the covid-19
pandemic. Digital services have become paramount to social distancing measures,
and this has made companies that can carry out a speedy and efficient digitization
process essential. Digital businesses have recorded historical earnings during the
pandemic. In addition, it is also crucial to consider that low-interest rates have attrac-
ted new investors keen on diversifying their portfolios with variable income securities.

7
 fundraising by type BRL billion

13.6

0.9 12.4
12.7
1.7

10.7

6.6
5.2 3.1

0.8
4.4
3.5

2017 2018 2019 2020

Venture Capital Private Equity

In 2020, the total capital raised was BRL 12.1 billion, almost double the amount in 2019.
However, only 11.6% came from VC, which raised BRL 1.4 billion in 2020.

It is worth noting there is a trend that should change the way early-stage technology-
-based companies enable their business models; the expansion of equity crowdfun-
ding platforms, driven primarily by the pursuit of assets like variable income. The po-
pularization of retail or individual investing paves the way for a new start-up scenario
in Brazil to prevail even more in the coming years.

According to the Folha de S. Paulo newspaper, one of the leading media vehicles in the
country, crowdfunding companies registered record numbers since 2017 comparing the
last months of 2020 and the first one of 2021, the year in which the Comissão de Valores
Mobiliários (The Brazilian Securities and Exchange Commission) regulated the market.

The maturation of the start-up ecosystem in Brazil is significant, as tech-based compa-

nies continue to play an increasingly vital role. In the short and mid-term, these compa-
nies need to continue being more and more digitally present, especially since Brazilian
agencies have been tackling many obstacles and adversities imposed by the health crisis
while attempting to vaccinate the vast population spread out across the country.

8
number of companies
invested by sector VC 2020

1Q 2Q 3Q 4Q TOTAL T.

Adtech & Martech 9 5 6 6 26 10%

Agtech 2 3 2 1 8 3%

Cloud 2 2 1%

Constructech & Proptech 6 2 5 1 14 5%

E-commerce 1 1 3 5 2%

Edtech 1 1 4 2 9 4%

Energy & Cleantech 1 1 3 5 2%

Fintech & Insurtech 11 10 18 19 58 23%

Foodtech 1 3 1 5 2%

Healthtech 7 6 10 4 27 11%

HRtech 1 1 3 4 9 4%

Lawtech 1 1 2 2 6 2%

Retailtech 1 1 8 5 15 6%

Software 8 4 7 5 24 9%

Transportation & Mobility 4 4 6 5 19 7%

Other 5 4 10 4 23 9%

Total 59 45 87 64 255 100%

Fintechs and Insurtechs were the focal targets of VC in 2020, representing 23% of
the companies backed by VC that year. Of a total of 255, 58 start-ups can be found in
finance and insurance. Then there are the healthtechs (health, reaching 11%) and the
Adtechs and Martechs (advertising and marketing, representing 10%).

Despite representing only 3% of the total companies backed, Agtechs deserve to be

noted in this study due to the strategic role agribusiness plays on the Brazilian eco-
nomy. In 2020, as we will see below, agriculture was the only one of the three major
sectors of the economy which managed to increase its share of GDP.

9
 ENJOEI AND MÉLIUZ
the arrival of start-ups on
the Brazilian stock exchange

Even amid the new coronavirus pandemic, 2020 was a lively year for the Brazilian capital
market, which experienced a recent boom of IPOs: 28 in all, the highest in just over a
decade. And this wave of initial public offerings brings with it something never before
seen. Making their debut, Enjoei and Méliuz were listed on the B3 local stock exchange.

These IPOs mean the stock exchange is being progressively seen as an exit option
for VC funds, which generally chose to sell their holdings to companies they deem
strategic, that is, large enterprises interested in market expansion. The scenario for
technology-based companies changed from 2018 onwards when the 99 transport
app transformed into a unicorn with its sale to the Chinese Didi Chuxing. Since then,
investors have been keeping a much closer eye on the Brazilian start-up arena.

The advent of start-ups on the capital market displays the greater significance of
online business models, very common in this ecosystem. Such is the case of Enjoei,
which gives individuals the possibility to create their online stores to sell clothes,
accessories, furniture, and other second-hand objects, thus leveraging the trend of
circular consumption. The company went public in November 2020, making an initial
public offering of BRL1.13 billion. From November 2020 to March 2021, its company
share value rose 8.7%. Among the sellers were venture capital funds Bessemer and
Monashees and managers Estoril and Dynamo.

Méliuz Redpoint, a cashback company whose corporate structure also included Mo-
nashees, Respoint eventures, Kaszek among others, debuted the B3 exchange already
worth BRL1,2 billion, with shares traded at BRL10. From November 2020 to January
2021, the company share value saw an upswing of 90%. By way of comparison, in the
same period, the Ibovespa exchange rose 21%, making Méliuz’s IPO one of the most
prosperous in 2020. With BRL1.2 billion received in cash, Méliuz will expand its adver-
tising, launch more financial services and make additional acquisitions.

10
venture capital deals in Brazil 2020

TARGET COMPANY TYPE DATE AMOUNT INVESTOR

BRL

2tomorrow Sports Investment Nov 2020 1,500,000 Outfield Capital

4Student Investment Jan 2020 - Bossa Nova

7 Waves Investment Sep 2020 500,000 DOMO Invest

Santander Innoventures
A55 Investment May 2020 37,100,000
Energy

Accountfy Investment Mar 2020 34,450,000 Several

Redpoint eventures,
Accountfy Investment May 2020 -
HDI Seguros

E.Bricks, Softbank,
Acesso Digital Investment Sep 2020 620,000,000
General Atlantic

KPTL (Inseed/A5
Aevo Investment Sep 2020 4,200,000
Manager)

Agrotools Investment Jun 2020 - KPTL

AIO Educação Investment Aug 2020 1,494,600 Fuse Capital

Fundação Educação Investment Nov 2020 - Wayra

Allya Investment Aug 2020 7,500,000 Domo Investments

Alright Investment Oct 2020 5,000,000 KPTL

11
 TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Ribbit Capital, Y
Allude Investment Sep 2020 12,190,000 Combinator, Maya
Capital and GFC

Amyi Investment Oct 2020 1,000,000 GV Angels; Wishe

Arena Investment Jun 2020 11,448,000 Red Pointeventures

Inovrabra; Parallax
Asaas Investment Oct 2020 37,000,000
Ventures

ASC Brazil Investment Jan 2020 - Algar Tech

Asksuite Investment Aug 2020 3,985,600 Abseed

FIP Criatec III, Wayra

Active Solutions Investment Sep 2020 -
Brasil

Domo Invest Gestora

de Ativos Financeiros
Ativup Investment Jan 2020 2,000,000
e Valores Mobiliários
Ltda.

Atomic Agro Investment Mar 2020 3,000,000 Capital Lab

Atta Investment Jan 2020 - Distrito Venture

Avenue Investment Out 2020 35,000,000 Igah Ventures

Avenue Investment Jan 2020 - E.Ricks Early Stage

Monashees Capital,
Azion Technologies Investment Nov 2020
Qualcomm Ventures

Angels of Brazil; Poli

Drink at the door Investment Oct 2020 1,000,000
Angels

12
TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Beejobs Investment Jul 2020 19,742,500 Capital Indigo

Birdie Investment Aug 2020 8,480,000 Astella investments

Bitcapital Investment Jun 2020 1,007,000 Gear Ventures

Bitfy Investment Oct 2020 1,400,000 Urca Angels

Biz Capital Investment Jun 2020 65,000,000 DEG

Biz Capital Investment Oct 2020 20,000,000 Oikocredit

Domo Invest Gestora

de Ativos Financeiros
Bloxs Investments Investment Jan 2020 3,000,000
e Valores Mobiliários
Ltda.

Blue365 Investment Jan 2020 - Distrito Venture

Boomerang Investment Jun 2020 2,962,700 Canary

Astella Investments,
Bossabox Investment Nov 2020 8,000,000
Redpoint eventures

Bpool Investment Oct 2020 5,000,000 Chromo Invest

Bro. Investment Jan 2020 15,000,000 E.Bricks

Value Capital Group;

Cashew Investment Aug 2020 12,985,000
Canary

Carflix Investment Jun 2020 14,840,000 Bvx

13
 TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Cargox Investment Jan 2020 416,000,000 Farallon, Several

LGT Lightstone Latin

Cargox Investment Apr 2020 -
America

VOX Capital; Bootslab

Celcoin Investment Oct 2020 23,000,000
(BTG)

Celebryts
Investment Aug 2020 - Bossa Nova Investments
[Cely]

Celero Investment Jun 2020 - Honey Island

Certus Investment Aug 2020 - Pool Fintech

Chiligum videos Investment Jun 2020 1,974,250 Gvangels

Clarke Energia Investment May 2020 3,200,000 Canary

Edp Ventures Brasil,

Clarke Energia Investment Aug 2020 3,000,000
Canary

Iporanga Investments;
Classpert Investment Jul 2020 4,929,000
Canary

Clickcash Investment May 2020 2,597,000 Domo Investments

Closecare Investment Aug 2020 2,120,000 Domo Investments

Clubbi Investment Jul 2020 - Canary

Cognitive Investment Dez 2020 - Next A&M Ventures

14
TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Media Development
Colab Investment Jul 2020 3,000,000 Investment Fund (MDIF);
Luminate

Combudata Investment Aug 2020 2,800,000 Canary

Communy Investment Nov 2020 400,000 Bossa Nova Investments

Conexa Saúde Investment Jan 2020 - E.Ricks Early Stage

Invest Tech; KPTL; GV

Configr Investment Oct 2020 4,000,000
Angels; Garan Ventures

Gávea Angels;
Congresse.me Investment Jul 2020 1,481,350
Investors.vc.

Agile Account Investment Dez 2020 - Poli Angels

Simple Account Investment Jul 2020 662,500 Y Combinator

Simple Accoun Investment Dez 2020 13,750,000 Quartz Investments

Convenia Investment Nov 2020 - Crescera Investments

Softbank, Endeavor
Cortex Investment Jul 2020 118,455,000 Catalyst, Red
Pointeventures, Several

Cortex Investment Out 2020 50,000,000 Riverwood Capital

Credere Investment Sep 2020 - Domo Investments

LGT Lightstone,
Credits Investment Dez 2020 1,275,000,000
Softbank, Kaszek

15
 TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Credpago Investment Jul 2020 - BTG Pactual

Kaszek Ventures;
You take care Investment Oct 2020 17,000,000
Península Investments

Cyberlabs AI Investment Aug 2020 28,000,000 Redpoint eventures

Cyklo Agritech Investment Jun 2020 - Alvares & Marsal

Datapolicy Investment Oct 2020 1,500,000 Cedro Capital

Bus-side Investment Nov 2020 4,097,500 Gvangels

Diário Escola Investment Oct 2020 1,000,000 GV Angels

GAA Investments,
Digibee Investment Jun 2020 26,500,000 Laércio Albuquerque,
Several
Astella Investments,
Domo Investments,
Diin (Grão) Investment Jan 2020 - VOX Capital, Several
managers without value
opening
Kaszek Ventures,
Valor Capital, ONE
Docket Investment Mar 2020 34,000,000
VC, Several managers
without value opening
Value Capital Group,
Global Founders
Dolado Investment Dez 2020 11,000,000
Capital, Provence,
Norte Capital

Domicile Investment Sep 2020 - Crescera Investments

Igah Ventures, Astella

Dr. Jones Investment Oct 2020 6,000,000
Investments

I bought.com Investment Nov 2020 460,036,500 Poli Angels

16
TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Easelabs Investment Jul 2020 - Alvarez and Marshall

Monashees, NBV, Pear

At home Investment Sep 2020 20,000,000 Ventures, Caravela;
MELI Fund

Even3 Investment Oct 2020 4,000,000 Domo Invest

Faccio Investment Nov 2020 27,500,000 Monashees Capital

BTG bank; ENFINI

Investments (PWR
Fazenda Futuro Investment Sep 2020 115,000,000
Capital); Monashees;
Go4it Capital

Atlantico, Canary,
Festalab Investment May 2020 7,950,000
Several

Fieldlink Investment Sep 2020 1,000,000 Iporanga Investments

Fin-x Investment Oct 2020 1,182,500 Domo Invest

Findup Investment Aug 2020 4,982,000 Domo Investments

Fitbank Investment Jul 2020 - JP Morgan

Flapper Investment Nov 2020 2,468,581,50 Startmeup, Confrapar

Floki Investment Dez 2020 3,600,000 Iporanga Ventures

Lorinvest Gestão de
Framefy Investment Mar 2020 5,000,000
Recursos Ltda

Gama Academy Investment Jan 2020 3,000,000 Smart Money Ventures

Gavea Marketplace Investment Dez 2020 2,200,000 Domo Invest

17
 TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Genial Care Investment Jun 2020 - Canary

Genoa performance Investment May 2020 2,332,000 Verus

Agricultural
Investment Jun 2020 - KPTL
Management

Malte Huffmann; Philipp

Gofind Investment Aug 2020 1,500,000 Povel; Sérgio Cochela;
INVISTO; TM3 Capital

Gove Investment Oct 2020 8,000,000 Astella Investments

Graphcall Investment Oct 2020 550,000 Urca Angels

Grow (Yellow + Grin) Investment Jan 2020 - Mountain Nazca

Hent Investment Jun 2020 5,000,000 Canary

Hilab Investment Nov 2020 55,000,000 Peninsula Investments

Br Angels Smart
Home Agent Investment Dez 2020 -
Network

Hrestart Investment Sep 2020 - Bossa Nova Investments

Hublocal Investment Oct 2020 600,000 Anjos Brasil

Ideal Investment Sep 2020 100,000,000 Kaszek Ventures

Intelipost Investment Dez 2020 130,000,000 Riverwood Capital

Involves Investment Mar 2020 23,500,000 Bridge One Investments

18
TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Jestor Investment Aug 2020 1,696,000 Canary

Just for you Investment Aug 2020 - Neuron Ventures

Kangu Investment Mar 2020 6,000,000 NXTP Ventures

Astella Investments, SP
Kenoby Investment Jan 2020 23,000,000 Ventures Gestora de
Recursos Ltda

Kestraa Investment Aug 2020 14,946,000 Canary

Km Online Investment Mar 2020 4,200,000 XMS Partners

Kzas.ai Investment Mar 2020 20,000,000 Redpoint

LAR.app Investment May 2020 5,300,000 Global Founders Capital

Abseed Ventures,
Order, Several
Leads2b Investment Mar 2020 10,000,000
managers without value
opening

Sandbox Ventures; SP
Leaf Investment Sep 2020 10,600,000
Ventures

Legiti Investment Nov 2020 13,750,000 Kaszek Ventures

Leve Capital Investment Jun 2020 5,300,000 Global Founders Capital

Darwin Capital and

Linker Investment Dez 2020 12,000,000
Private Investors

Livance Investment Jul 2020 - Astella Investments

19
 TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Andreessen Horowitz,
Fifth Wall Ventures,
Loft Investment Mar 2020 892,500,000 Vulcan Capital, Several
managers without value
opening

Caravel, Invest Tech,

Logcomex S.A. Investment Jul 2020 3,000,000
Several

Redpoint eventures
Magnetis Investment Jul 2020 60,000,000 Vostok Emerging
Finance

Superjob Venture
Marta Inteligência Investment Jan 2020 -
Capital

Memed Investment Fev 2020 20,000,000 DNA Capital

Superjob Venture
Metha Energia Investment Jan 2020 -
Capital

Mettzer Investment Aug 2020 - Bossa Nova Investments

My Delivery Investment Jul 2020 197,425 Equity Rio

Meutudo Investment May 2020 12,455,000 Domo Investments

Mindminer Investment May 2020 1,563,500 BR Angel

Minery Investment Nov 2020 3,000,000 Happy Capital

Mobees Investment Jul 2020 5,000,000 Canary; Norte Capital

Mottu Investment Jul 2020 10,600,000 Caravela Capital

Investments will be
Nelogica Investment Nov 2020 550,000,000
growing; Vulcan

20
TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

General Atlantic;
Neon Investment Sep 2020 1,600,000,000
Blackrock

Monashees Capital,
Nomad Investment Dez 2020 30,000,000
Abstract

Nubank Investment Jun 2020 1,650,000,000 Several

Numenu Investment Jan 2020 - Bossa Nova

Qualcomm Ventures;
Nuvemshop Investment Oct 2020 165,000,000
Kaszek Ventures

Bossa Nova
Nvoip Investment Oct 2020 3,000,000 Investments; BR Angel
Smart; Cedro Capital

Ocean Drop Investment Sep 2020 2,000,000 Caravel

FJ Labs and Maya

Oico Investment Oct 2020 7,950,000
Capital

Olga Ri Investment Jan 2020 - Kaszek Ventures

Olist Investment Nov 2020 310,000,000 Softbank

Olivia Investment Fev 2020 25.000.000 Banco Votorantim

Barn Investments;
Origin Investment Jul 2020 5.231.100
Everyday life

Packid Investment Jul 2020 1,000,000 WE Ventures

Paketá Investment Dez 2020 9,000,000 Shift Capital

Alvares & Marsal,

Payface Investment Mar 2020 2,600,000
Harvard Angels, Several

21
 TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Petlove Investment Mar 2020 250,000,000 Softbank

Petlove Investment Jul 2020 125,000,000 L Catterton

Phonetrack Investment Mar 2020 1,000,000 Caravela Capital

Monashees, Meli Fund,

Pier Investment Aug 2020 79,460,000 Canary, BTG Pactual
Bank

Pink Investment Oct 2020 3,000,000 Fuse Capital

Kaszek Ventures,
Pipo Saúde Investment Jul 2020 24,380,000 Monashees, Onevc,
Several

Pix Media Investment Dez 2020 - Poli Angels

Blue like an Orange

Placi Investment Sep 2020 30,000,000
Sustainable Capital

Preamble Tech Investment Oct 2020 10,000,000 KPTL (criatec 3)

Privally Investment Nov 2020 - Tivit Ventures

Itaú, Bradesco, Kaszek

How much Investment Sep 2020 79,500,000
Ventures, Coatue

Quasar Flash Investment Sep 2020 25,000,000 Valor Capital Group

R2U Investment Nov 2020 4,400,000 Canary; Norte Ventures

Radarfit Investment Sep 2020 500,000 DOMO Invest

Canary, Norte Ventures,

Rapicare Investment Jun 2020 4,971,400
Several

22
TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Rapicare Investment Jul 2020 5,300,000 Canary; North

Tow me. Investment Aug 2020 - Random Ventures

Rede Vistorias Investment Sep 2020 5,500,000 Domo Investments

Bwater Ventures,
Shipping Online Investment Jun 2020 -
Kaszek Ventures

Kevin Efrusy, Several

Remessa Online Investment Jun 2020 108,650,000 managers without value
opening

Repassa Investment Jan 2020 - Bossa Nova

Redpoint Ventures,
Repassa Investment Sep 2020 7,500,000
Bossa Nova Investments

Resolvvi Investment Aug 2020 - Bossa Nova Investments

Safe Espace Investment Sep 2020 - Maya Capital

Monashees Capital;
Sami Investment Oct 2020 85,250,000 Redpoint eventures e
Valor Capital
DNA Capital, Valor
Capital, Several
Sanar Investment Mar 2020 60,000,000
managers without value
opening

Primatec (Antera
Sem processo Investment Aug 2020 -
Gestão)

Sensix Investment Oct 2020 990,000 Domo Invest

Smilink Investment Mar 2020 9,800,000 Barn Investments

23
 TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Solfácil Investment Jul 2020 21,000,000 Valor Capital Group

TPG Capital, Unbox

Capital, Several
Solinftec Investment Mar 2020 200,000,000 managers without
disclosure of the
amount
Canary, Global
Founders Capital,
SouSmile Investment Jan 2020 50,000,000 Kaszek Ventures,
Several managers
without value opening

Spark Investment Jul 2020 8,000,000 Apex Partners

Speedbird Investment Sep 2020 - DOMO Invest

Spinpay Investment Out 2020 - Quartz Investments

Stark Bank Investment Jan 2020 - Iporanga Investments

Stopclub Investment Dez 2020 - Redpoint eventures

Supersim Investment Jan 2020 - Distrito Venture

Suprevida Investment Jul 2020 530,000 Eurolife Investments

ONEVC; Global
Swap Investment Jul 2020 17,490,000
Founders

KPTL (Inseed/A5
Syos Investment Jul 2020 10,000,000
Gestora)

Take Blip Investment Oct 2020 550,000,000 Warburg Pincus

Joá Investments, IFC,

Tembici. Investment Jul 2020 249,100,000 Red PointEventures,
Valor Capital, Diversos

24
TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

TerraMagna Investment Nov 2020 11,000,000 One VC; Maya Capital

The Coffee Investment Aug 2020 - Monashees

Time Energy Investment Sep 2020 2,000,000 Edp Ventures Brasil

Tissue lab Investment Aug 2020 200,000 Finep

Traive Investment Nov 2020 14,000,000 SP Ventures

Trakto Investment Jan 2020 - Bossa Nova

Transfeera Investment Aug 2020 - Pool Fintech

Goodz Capital, Honey

Transfeera Investment Oct 2020 2,970,000 Island, Bossa Nova e
Curitiba Angel

Barn Investments; Bulb

Trocafone Investment Dez 2020 30,000,000
Capital Wayra

Trybe Investment Mar 2020 42,000,000 Atlântico

Bossa Nova, Bootslab,

Banco BMG, XP
Investments, Several
Vai.Car Investment Mar 2020 380,000,000
managers without
disclosure of the
amount

Viva psicologia Investment May 2020 5,300,000 Neuron Ventures

VivaBem (Vibe) Investment Mar 2020 12,750,000 Webrock Ventures

Iporanga Ventures,
Voll Investment Jun 2020 3,975,000
Wayra, Diversos

25
 TARGET COMPANY TYPE DATE AMOUNT INVESTOR
BRL

Tiger Global, Lone Pine

Capital, Constellation,
VTEX Investment Sep 2020 1,250,000,000
Endeavor Catalyst e
SoftBank

Br Angels Smart
Vuxx Investment Dez 2020 2,500,000
Network

Warren Investment Jul 2020 120,000,000 QED Investors

Weel Investment Mar 2020 80,000,000 Banco Votorantim

Wellbe Investment Jan 2020 - Bossa Nova

Wild Life Investment Aug 2020 636,000,000 Vulcan Capital

Honey Island, Bossa

Worc Investment Dez 2020 -
Nova e GV Angels

Yuca Investment Jan 2020 20,000,000 Monashees

Yuca Investment Jul 2020 1,828,500 Bloxs

Zee.dog Investment Jul 2020 100,000,000 TreeCorp Investments

Zenklub Investment May 2020 16,960,000 Indico Capital Partners

Zenvia Investment Mar 2020 270,000,000 Oria Capital

Source: ABVCAP study, considering public data from 2020.

26
27
 sector focus
AGRITECH

Of the three major sectors of the economy, only one made progress in terms of
Brazilian GDP in 2020: agriculture. While industry and services fell by 3.5% and 4.5%,
respectively, agribusiness activity grew by 2% compared to 2019, according to data
from the Brazilian Institute of Geography and Statistics (IBGE).

It was the boom in agricultural activity responsible for keeping the Brazilian GDP from
dropping beyond 4.1% last year. If one considers agribusiness as a whole – bearing in
mind services like cold storage and logistics companies found in the agri-food chain, for
example -, they will find its share of GDP represents very noteworthy amounts. Accor-
ding to a study by Brazilian Agriculture and Livestock Confederation (CNA) in partner-
ship with the Luiz de Queiroz College of Agriculture (ESALQ) at the University of São
Paulo (USP), 21.1% of what has been produced by the nation in 2019 has come from from
agribusiness.

Brazil has already established itself as the chief producer in the tropical food belt and
the third-largest global food exporter - it only lags behind the United States and the
Netherlands. Today, the country exports farming products and different types of meat
to more than 180 nations, among them China, the largest importer of Brazilian products.

highlights of the Brazilian

agricultural production

COFFEE ORANGE SUGAR CANE ETHANOL CATTLE SOY POULTRY CORN

Ranking 1st 1st 1st 2nd 2nd 2nd 3rd 3rd

2.5 14 638 33.1 241 103 1.45 91

Production million million million billion million million billion million
tons tons tons liters heads tons birds tons

Source: Brazilian Institute of Geography and Statistics’ 2017 Agribusiness Census. Available in the “Radar Agtech Brasil 2019” report titled Mapeamento do Setor Agro
Brasileiro (Embrapa, SP Ventures and Homo Ludens).

28
Brazil boasts a geographical advantage that contributes to its excellent farming per-
formance: the country’s territory, of wide latitudinal extension, has a considerable
assortment of photoperiods, climates (even microclimates), and soils. Whereas in
temperate zones, where the great powers of the globe concentrate, climate condi-
tions make it possible to harvest only once per year, in Brazil, that number can triple.

Certainly, drawbacks are also a part of the Brazilian agriculture reality. The nation’s
nature-given characteristics favor the incidence of pests and weeds, for example. In ad-
dition, the erosion associated with high rainfall rates can be detrimental to some crops.

All that has made innovation an early pillar of the Brazilian agribusiness, replacing
techniques and imported products considered obsolete. Brazil needed to learn its
own way of doing agribusiness. A crucial leap in its pursuit of sector innovation ha-
ppened in the 70s, when the Brazilian Agricultural Research Corporation (Embrapa)
was founded, a public company that enables joint research among dozens of Brazilian
institutions.

In recent decades, Brazilian agriculture has stood out in the global landscape thanks to its
investment in new tech and new tropical farming methods. It is most likely in this section
of the country, which has received the nickname “world granary”, where more innovative
solutions are being conceived, capable of facing the agri-food challenges of the present-
-day world, which demands much more efficient and sustainable agriculture.

That is where agtechs, businesses looking to apply new technologies to the agri-
cultural sector, come into play. Among the countless solutions offered are agricul-
tural equipment, weather data, genetic upgrades, fertilizers, herbicides, irrigation
systems, remote sensors (including drones), property management techniques,
and even specialized big data analysis.

This niche of start-ups began to appeal to investors in 2013, when Monsanto acquired
Climate Corporation, a climate risk analysis, and management company, for USD $930
million. Worldwide, they have received increasingly substantial backing, sometimes
overshadowing niches considered pivotal, like fintechs.

Little by little, eyes turn to Brazil as a major hotbed of agtechs, and this is due both to
its nature-given advantages and to the efforts of research centers and major pro-
ducers throughout the agri-food chain. However, according to the “Radar Agtech
Brasil 2019” in its report titled Mapeamento do Setor Agro Brasileiro (Map of Brazi-
lian Agribusiness Sector), published by Embrapa in partnership with SP Ventures and
Homo Ludens, the backing received by start-ups in this sector in Brazil is still inferior
to other categories, such as financial solutions and mobility.

29
 sample of investments in
the Agtech sector in Brazil 2020

INVESTORS DATE AMOUNT TARGET COMPANY

One VC; Maya Capital Nov 2020 11,000,000 TerraMagna

SP Ventures Nov 2020 14,000,000 Traive

Unbox Capital Mar 2020 - Solinftec

TPG Capital Mar 2020 - Solinftec

Multiple managers Individual

Mar 2020 200,000,000 Solinftec
amounts undisclosed

KPTL Jun 2020 - Agrotools

Domo Invest Oct 2020 990,000 Sensix

Capital Lab Mar 2020 3,000,000 Atomic Agro

Alvares & Marsal Jun 2020 - Cyklo Agritech

KPTL Jun 2020 - Agricultural Management

Sandbox Ventures; SP Ventures Sep 2020 10,600,000 Leaf

The most recent edition of the study to date was made available in 2019. In that year, the
mapping recognized and scrutinized 1125 start-ups, of which about 90% were situated in
the South and Southeast regions of Brazil, more notedly in the cities of São Paulo, Piraci-
caba, and Campinas. Piracicaba Valley is where the Agtech Valley can be found, along with
the Luiz de Queiroz College of Agriculture (ESALQ) of the University of São Paulo (USP).

The report uses three categories to classify start-ups according to their specializa-
tion: a) before the farm, b) inside the farm, and c) after the farm.

It is the latter that 532 companies are concentrated into, dedicated to the following
activities: innovative foods and new food trends (246); trading venue and Marke-
tplace (95); storage, infrastructure, and logistics (29); online grocery store (29);
advisory, acceleration or association (26); Industry 4.0 (autonomous store and retail

30
 A B C

before the farm inside the farm after the farm

management (24); online restaurant and meal kit (24); bioenergy and biodiversity
(14); plant factory and new forms of planting (13); food security and traceability (12);
and packaging, environmental and recycling systems (12).

The second category with most start-ups is inside the farm, listing 397 companies.
These companies are dedicated to the following activities: agricultural management
system (122); UAV (Unmanned aerial vehicle) (43); and precision farming (34); machinery
and equipment (34); remote sensor (29); waste and water management (21); meteorology
and irrigation (21); internet of things (20); monitoring (19); content, education and social
network (18); imaging diagnosis (8); and aquaculture (7). 196 start-ups before the farm
are dedicated to fertilizers, inoculants, and nutrients (41); genomics and biotechnology
(40); biological control (32); financial services (24); laboratory analysis (20); nutrition and
animal health (20); shared economy (10); and seeds and seedlings (9).

Financial service offerings to agricultural companies, considered after the farm, gave
rise to the so-called agfintechs, providing credit to farmers, increasing efficiency in
negotiations. In the last quarter of 2020, Brazilian start-up Terra Magna, which buys
debt from small and medium-sized farmers, received $2 million in backing in a round
led by OneVC with the participation of Maya Capital. The company assesses risk
through a platform that combines satellite imagery, climate data, government records,
and the farmer’s financial standing.

A different example of a Brazilian agfintech receiving investments in 2020 was Traive,

into which SP Ventures invested BRL 12 million. The start-up, like Terra Magna, offers
financial solutions based on farmers’ credit profiles.

The “Radar Agtech Brasil 2019” report, already cited, indicates a trend; the inter-
val between the entry and exit out of an investment is less in this category than in
others, as per the example of the Strider start-up. The company was acquired by
Syngenta only five years after being founded.

Agribusiness start-ups find a very promising scenario in Brazil. The familiarity of

the Brazilian economy with agriculture means the country can become a reference
in the agtech segment.

31
 sector focus
HEALTH

Social distancing, brought on by the novel coronavirus pandemic, has even affected an
area of work based on direct contact: health services. We have been forced to abandon
the notion that physical proximity between patient and a health professional is a must
for a consultation; thus more and more people have adopted online healthcare.

By the beginning of May 2021, the number of deceased from covid-19 in Brazil had
already exceeded 400,000. Next to this extraordinary figure is another factor not
yet estimated: indirect deaths, those that, although related to other diseases,
would have been circumvented had it not been for the current state of hospital
overburden. It is during this period that so-called telemedicine or remote health-
care has become an integral part of everyday life.

Despite not having been regulated in Brazil, remote healthcare has been provisionally
sanctioned by different health agencies, such as the Federal Council of Medicine (CFN),
the Federal Council of Nutritionists (CFN) and the Federal Council of Psychology (CFT).
According to Estadão, a renowned Brazilian communications vehicle, more than 2
million consultations were held remotely by November 2020.

The Brazilian health market is among the ten most prominent in the world: in 2017, accor-
ding to the Brazilian Institute of Geography and Statistics (IBGE), the market totaled more
than BRL 608 billion, equivalent to 9.2% of the GDP that year. The sector is expected to be
even more bullish in the coming years, considering that a quarter of the Brazilian popula-
tion will reach 65 years or older by 2060, driving healthcare demand even higher.

The growth of remote healthcare illustrates, along with numerous other examples,
how technology has revolutionized the Brazilian healthcare sector in the immediate
present. And there are several indications that this industry will be one of the most
affected by the tech revolution.

Healthtechs, companies that offer technological solutions in the medical sector, have
been in the spotlight in much of the world since the pandemic outbreak. The report
titled “Teses de Investimento para 2020 Pós-covid” (2020 Post Covid Investment
Thesis), published by BNP Paribas in the Estadão’s E-investor section, highlights that
the fear that new pandemics might occur from the onset of other virus outbreaks has
driven investments in health, which is growing at an augmented pace.

It is worth noting that vaccines against covid-19 have been developed in record
time. And it’s easy to understand why: about 5% of the world’s scientific pro-

32
duction in 2020 concentrated on coronavirus, according to data provided by MIT
Technology Review Brazil. According to the publication, Brazil was among the 11
nations that most disclosed data on Covid-19 the year the pandemic arose.

However, one must consider that the biotech sector is still delicate in countries like
Brazil. The market’s leaders, responsible for producing the first covid-19 vaccines, are
all foreign. The biotech sector is where these start-ups are most evolving and able to
get backing from more and more investors.

Data from the Brazilian Startups Association, published in November 2020 by Você S/A (You
Inc.) an entrepreneur magazine, shows that of the 13,000 start-ups identified in the survey,
396 operate in the health and well-being sector. The figure makes this the third largest
start-up market in Brazil, lagging behind the niches of education (edtechs) and finance
(fintechs) only. According to a 2018 study by Liga Ventures, most healthtechs offer solutions
in management systems (17%), hard science (15%) and physical and mental well-being (10%).

sample of investments in the

healthtech sector in Brazil 2020

AMOUNT INVESTOR
TARGET COMPANY DATE
BRL

Closecare Aug 2020 2,120,000 Domo Investments

Conexa Saúde Jan 2020 - E.Ricks Early Stage

Cuidas Nov 2020 17,000,000 Kaszek Ventures; Península

Easelabs Jul 2020 - Alvarez and Marshall

Genial Care Jun 2020 - Canary

Hilab Nov 2020 55,000,000 Peninsula Investments

Livance Jul 2020 - Astella Investments

Memed Fev 2020 20,000,000 DNA Capital

Ocean Drop Sep 2020 2,000,000 Caravel

33
 AMOUNT INVESTOR
TARGET COMPANY DATE
BRL

Kaszek Ventures, Monashees,

Pipo Saúde Jun 2020 24,380,000
Onevc, Several

Blue like an Orange

Placi Sep 2020 30,000,000
Sustainable Capital

Radarfit Sep 2020 500,000 DOMO Invest

Monashees Capital; Redpoint

Sami Nov 2020 85,250,000
Eventures and Capital Value

DNA Capital, Valor Capital,

Sanar Apr 2020 60,000,000
Several investors

Smilink Mar 2020 9,800,000 Barn Investments

Canary, Global Founders

Capital, Kaszek Ventures,
Sousmile Jan 2020 50,000,000
Multiple managers Individual
amounts undisclosed

Suprevida Jun 2020 530,000 Eurolife Investments

Suprevida Jul 2020 - Eurolife Investments

Tissue lab Aug 2020 200,000 Finep

Viva psicologia May 2020 5,300,000 Neuron Ventures

Vivabem (Vibe) Mar 2020 12,750,000 Webrock Ventures

Wellbe Jan 2020 - Bossa Nova

Zenklub May 2020 16,960,000 Indico Capital Partners

34
Sami, a healthtech focused on the supplementary health insurance segment enticed
the most attention from investors in 2020. The company received BRL 85 million in a
Series A round led by the funds Valor Capital Group (Gympass, Loft) and Monashees
(Rappi, 99), plenty of capital to enable a change in its business model. The company,
founded in 2018, will offer its own health insurance.

The bet of the business will be on meeting the demands of small and medium compa-
nies, the leading employers of the country, who often are unsuccessful in offering health
plans to teams. To keep big companies from being the only ones who can afford this type
of expense, Sami has developed cost-effective health plans, contemplating a lean and
efficient selection of hospital networks. Another pillar of the new business model refers to
digitization: allowing for online patient history and triage via remote consultation.

Another start-up that attracted investments in 2020 was Hilab, which COVID-19 raised
BRL55 million. The company uses technology to decrease both the cost and delivery time
of various types of exams, such as HIV, dengue and, more recently, covid-19. Its rapid tests
have been used by a very diverse range of customers from large urban centers to the
outmost corners of the republic. The company earned approximately BRL 200 million last
year and has more than doubled the number of employees, which jumped from 90 to 215.

Experience has shown that the blending of technology and healthcare enables many
possibilities for human well-being overall. Artificial intelligence (AI), for example, is
gaining more and more room in medicine thanks to its ability to diagnose disease and
recommend treatment through automated analysis of an extensive dataset.

It is already known that computers can read mammography exams well, and some have
been shown to read them better than doctors. AI has also helped in the development
of devices aimed at patient-centered therapy or communication.

In 2020, of the 255 companies backed by VC funds, 27 (11%) were healhtechs.

Among them, there is Tissue Lab, a start-up using AI and 3D printing to develop
bioartificial organs and tissues. An example of how machine learning has made the
healthcare field even more innovative.

35
36
 LEGAL
OVERVIEW
FM DERRAIK
FABIANA FAGUNDES, PEDRO FERREIRA E to flip or not
RODRIGO MENEZES, to flip: that is
Partners
FM/Derraik the question...

Years ago, Brazilian startups that were looking for larger checks/rounds (Series B and
beyond) had, in most of the cases, to find such check abroad. There was very little
capital available for venture capital-backed startups in the country at that time.

Hence, the term sheets proposed by the potential investors, often had a section
describing that the startup to be funded should undergo a process commonly called
“flip”. “To Flip” is the recent denomination of the “Roll Up” restructuring process
used in the 90’s by dotcom companies’ shareholders aiming at “IPOing” in Nasdaq
and other stock exchanges abroad. In simple words, it encompasses the conveyance
by startup’s shareholders of their equity interest in the Brazilian operating company
to a corporate structure composed of a Cayman entity, controlling a Delaware entity
(usually an LLC) which, on its turn, would be the direct controlling shareholder of the
Brazilian operating startup.

This was usually adopted by offshore funds mainly for 2 reasons: (i) the Cayman/
Delaware/Brazil structure was better known by foreign investors from the old days in-
vesting in Dotcom companies of the 1990s; and (ii) there was an expectation of an exit
of such investment to take place abroad. Due to the lack of capital available on those
days for startups and due to the lack of knowledge or experience of Brazilian entre-
preneurs (very few of which had access to mainstream legal advisors), such structure
used to be accepted without a deeper analysis by founders which had no alternative if
they wanted to go on a VC backed journey.

In the past couple of years, aiming to anticipate this process and supposedly in order
to leave the structure more friendly for a potential future foreign investor, the com-
panies started to anticipate this process and one could notice that part of startups’
shareholders started flipping their equity as early as in seed rounds or even before
that, without thinking too much ahead. A herd effect was created.

However, as the industry grew more important, we have observed: (a) an increase of
sophistication of Brazilian startups and entrepreneurs; (b) the entering of the Brazi-
lian/foreign based companies (including corporate venture capitalists - CVCs) in the

37
 startup game; (c) and to the enhancement of M&A/IPO activity of the Brazilian tech
companies; not to mention (d) a considerable rise in the Brazilian based VC funds,
boosted by stories of successful exits in the ecosystem and the fall of internal interest
rates available for Brazilian investors, this offshore structure started being contes-
ted by some late stage investors, corporations (specially Brazilian based purchasers
of startups) and also by more mature entrepreneurs. An increasingly more relevant
(quantitively and qualitatively speaking) amount of onshore exit deals began to take
place and most relevant exits in the ecosystem became the most usual structure.

However, for both local strategic exits or local IPOs, the flipped structure is very
unfriendly. The consequence was that we had a lot of startups having to roll down (or
“unflip”) their structure back to Brazil to sell the company.

In spite of the above, it’s important to point out that the “Cayman – Delaware – Bra-
zil” structure still has its pros and its adepts: while it is true that investments in Brazil
have increased to almost BRL 20 billion in 2020 (and already reached BRL 11 billion in
the first quarter of 2021 according to local specialized sources and deal trackers) and
in spite of the fact that general partners of locally managed Brazilian and international
first tier Private Equity funds (with Brazilian onshore fund structures) have progressively
and more consistently started to consider investments in less late stages and started to
follow or anchor funding rounds that would have never been made by them a decade
ago, Brazilian startups still have relevant access to foreign investors in later stages.

This, for certain specific rounds, certain investors and startups with an international
activity (specially if the main business becomes a global business), is a very comfor-
table and known structure of the foreign investment funds, mainly after Series C for
startups which went or are going global and also for purposes of exits/IPOs abroad.

Also, the Cayman structure gives slightly more flexibility to set up stock option plans,
the most traditional mechanism used by startups to attract and retain talents (unless,
of course, the exit takes place in Brazil, situation in which a new local stock option
plan has to be put in place in exchange for the one in the offshore vehicle).

However, what they do not tell the Brazilian founders is that(A) if the exit is more likely
to occur in Brazil (either to a local strategic player or in a local IPO), then the flipped
structure creates additional challenges, delays, severe inefficiencies and costs (spe-
cially tax related) and risks for all or part of the shareholders of the company during
the exiting process. Also, besides having been consistently rejected by strategic
purchasers which are liable in Brazil for the payment of the tax on capital gains due by
sellers, it may create tax and regulatory constraints for some investors/entrepreneurs
vehicles when it involves the roll down process, mainly if the flip process was not
made following all the proper regulatory aspects; (B) the flip process involves higher
costs for set up and for maintenance, creating, sometimes, unnecessary costs and
expenses to the startup.

38
It is important to recall that differently from most Latin American countries, Brazil is
a country of continental dimensions and one of the largest economies worldwide, so
startups can have scalable businesses without any internationalization their activities.
Relevant national unicorns have been formed with purely local activities, which on its turn
makes the Cayman-Delaware structure even less necessary to the extent that they be-
come pass through single asset holders without too much substance or objectives other
than the simple runway to certain VC Funds who would only invest in flipped businesses.

In addition, nowadays, the foreigner investors are more familiar (and very comfortab-
le) with Brazilian legal structures and instruments (that have imported and adapted a
lot of mechanisms from more mature markets), so we have seen more of these inves-
tors willing to invest in Brazil. Added to the fact that the official interest rates in Brazil
have significantly decreased, forcing institutional investors to look to other classes
of assets, specially PE and VC. As a result, VC funds popped up all around and a large
amount or resources were shifted in that direction, creating more liquidity and more
options to funding the startups in Brazil and obviously, for exits.

The attentive reader is now concluding: if a precocious flip may be inevitable to

access certain offshore funds that do not wish to spend time in legal structuring in
early stages, on later stage equity rounds, keeping the structure locally is a no brainer,
specially with the entry of local investors in the game.

Therefore, to avoid unnecessary costs and future problems with an unfriendly structure, it
is vital to have deep thoughts on such topics before deciding to “flip” or not the company.

39
 GP PROFILE
MARCOS WILSON PEREIRA
Managing Partner
Lightrock

Lightrock, previously called LGT Lightstone, is a Growth equity

manager focused on impact investments. It is part of the
European LGT group, with over 100 years of operation. The LGT
group today has more than USD 250 billion under management
distributed among private banking, fund of funds and direct
investments. In Brazil, Lightrock has invested more than BRL 1.5
billion and has recently scaled up its activities. It seeks businesses
and entrepreneurs with the ability to transform the countries
where they operate through entrepreneurship.

1 • Give us an overview of LGT group record, and an integrated impact meth-

activities and the companies that make odology across our value chain.
up the portfolio in Brazil.
Lightrock is the direct investment arm of
LGT is one of the most significant financial the group, present in 4 continents, with
conglomerates in the world. Controlled over 50 deals. Our primary focus is on
by the royal family from the principality of Latin America, Europe and India.
Liechtenstein, the group operates in pri-
vate banking, fund of funds, philanthropy, In Latin America, our current portfolio
and direct investments. The four com- consists of six companies: Creditas, Cargo
bined areas amount to over $250 billion in X, Dr. Consulta, General Water, Vitamina
assets under management. (Chile) and Salauno (Mexico). In addition,
we have two other investments in the final
We are one of the global pioneers in stage of due diligence with the expecta-
impact investing, with over 14 years of tion of closing in the first half of 2021.
industry experience, a proven track

40
2 • Tell us a little about Lightrock’s market leader digital platform in terms
performance, such as company maturity of users and transported cargo, using
at time of investment and the level of cutting-edge technology. In addition,
governance desired, for example. the company generates a significant
impact in the country by increasing
Lightrock is an impact growth-equity the efficiency of the national logistics
fund. We invest in companies that are sector, reducing idle capacity of trucks,
transforming their industries, whether and consequently the emission of CO2.
through technology or with the adop-
tion of innovative business models that In all investments we seek to co-invest
are undergoing a high growth cycle. We with funds that not only work togeth-
like to support entrepreneurs who are er with us driving company results,
transforming the markets we invest in. but who also have complementary
know-how. Cargo X was just one of the
As for the company stage, we invest in examples, where alongside Goldman
companies that already have a proven and Farallon, we co-invested with Valor
product in a ramp-up stage. That is, Capital and the IDB, among others.
we seek companies where there is less Overall we have invested along with all
product risk when compared to execu- the most active players in the region.
tion risk. As a result, we usually support
companies in more mature stages (usual-
ly from Series B up), but we can also look 4 • Talk a little about recent investments,
at some early-stage opportunities if we as in Creditas, valued at US$ 1.75 billion,
understand that the company already has another Brazilian unicorn.
a proven ready to scale product.
We had been following Creditas for a
The impact is also essential to our long time before our investment, and
methodology. We seek companies we understand that the company has
where impact is inherent to their busi- always had the perfect combination of
ness model - we look for opportunities a team highly capable of delivering re-
that affect at least one of three verti- sults, a single product, and a huge ad-
cals: people, planet and productivity. dressable market, which today is poorly
served by financial institutions. We de-
cided to lead the last round of financ-
3 • In Q2 2020, you announced the ing when we realized that the company
acquisition of a stake in Cargo X, a was able to deliver great results even
logistics solutions company, along with during the COVID crisis and make good
Softbank and Farallon. Tell us a little acquisitions and successfully enter new
about that deal and the opportunities vertical operations, as is the case with
you see in the Brazilian logistics sector. its payroll deducted loans. Given the
market conditions, we understand the
The logistics sector in Brazil is still growth potential to be enormous. The
fairly dependent on national ground fact that prominent investors partook
transport, with 90% of all domestic with us on this deal shows the market
cargo moved through trucks. Facing also believes in the company thesis.
that reality, Cargo X stood out as the

41
 5. Lightrock seeks companies that such as financial services, health, edu-
measure and manage their social and cation, logistics, among others. These
environmental impact. How is that industries will continue to undergo deep
assessment done, and how do you as transformation in the region.
experienced managers collaborate to
create an impact thesis?
7. Have you already exited any
Our impact methodology is the result of investment in Brazil? Among the possible
several iterations we have had over these alternatives, what kind of divestment
14 years of experience in the sector. strategy has shown the best results?

Lightrock’s proprietary methodology Recently we sold our stake in Just Fit,

measures the potential to generate busi- one of the largest gym networks in
ness impact and the risk of executing this Brazil, to Smart Fit, the largest player in
impact thesis and involves the construc- the market in Latin America. In addi-
tion of a value creation plan to expand tion, we have already had the oppor-
the impact levels during our investment. tunity to exit other investments of ours
with good returns, but we decided to
We seek to help companies we invest wait because we still believed in our
in measure, evaluate and extend their assets’ growth potential. As an invest-
impact. In addition, we also help our ment philosophy, we have no interest
investees improve their ESG practices in getting out of our assets quickly. We
so that they are prepared for a possible believe in supporting entrepreneurs
exit via the stock market. throughout the cycle until they have
the maturity to walk on their own legs
and open up capital. In general we
6. Among the most opportune sectors believe that the market will continue to
in Brazil, which ones stand out, from evolve, and exits through IPOs will be a
your point of view, in the mid and long viable alternative to the traditional sale
term and for what reasons? to a strategic player.

We have an agnostic sectoral approach.

Regardless of where we invest, we look 8. Tell us a little about your perception
for sectors that are undergoing struc- of the Brazilian VC ecosystem from the
tural changes, where the use of technol- point of view of a global investor.
ogy and innovation will foster signifi-
cant changes in the markets where we Brazil’s VC landscape has undergone
operate. We seek to allocate our capital remarkable maturation in recent years.
where we see the greater capacity to Access to early-stage funding has grown
help the target company deliver prod- at a notable pace; teams of promis-
ucts and services that positively affect ing entrepreneurs have significantly
society or the environment. Combining increased and today show capabili-
these factors, it is natural that our pipe- ties comparable to some of the finest
line is more concentrated on sectors entrepreneurs from the best centers in

42
the world. The adoption of technology
has developed and the regulation of
several sectors has matured to sup-
port entrepreneurs and investors. The
result is that we have created unicorns
faster and faster in the Brazilian market.
On the other hand, we realize that
although there are many funds making
investments in early-stage, there is still
demand for growth capital, for funds
that like and have the expertise to act
in more advanced rounds. Capital is
fundamental so that companies in the
initial stage can continue to fast-track
growth, knowing that there is an active
Growth market that will support the
added capital demand. In our outlook,
despite all the development seen in
recent years, this is only the beginning.

43
 COMPANY PROFILE
PEDRO CONRADE
CEO
Neon

Founded in 2016, NEON is one of the largest fintechs in Brazil,

with about 10 million users. Originator of the first 100% digital
account in Brazil, in 2020 the company raised BRL1.6 billion in
a Series C round (led by General Atlantic), which allowed four
new investors: Blackrock, Vulcan Capital, Endeavor Catalyst
and Paypal Ventures, the latter investing for the first time in a
Brazilian fintech. Resources will be used to invest in technology
and develop new products. This was the fifth round of fundraising
since its foundation, having raised in all more than BRL 2 billion.

1 • How did the idea of creating NEON 2 • Tell us a little about the company’s
come about? history, from being founded to the
present moment.
Neon came about from the experience of
a frustrated customer of traditional banks. Neon is a young enterprise, but has
I was making, at the time, about BRL1,500 grown quite a lot. It came into existence
a month and spending BRL800 a year on in 2016 as the first 100% digital bank ac-
fees to have access only to an account count in Brazil and since then has been
and a card - that equation just did not expanding its product and service offer-
make sense. The company was established ings. Nowadays, it offers a full-fledged
to solve customer pains, and that’s how account, with the same core features as
it is to this day, us putting ourselves in traditional accounts: debit and credit
customers’ shoes. Our mission is to offer card; personal credit; bank deposits;
affordable services and products without transfers, payments, bank slips, invest-
charging hidden fees, providing efficien- ments - with the only difference being
cy and quality while always bearing the that there are no monthly or annual fees
customer’s experience in mind. We want to and everything can be resolved in just a
get more people into a healthier financial few steps on our app.
standing and enable all Brazilians to have
more access to quality financial services.

44
Throughout this trajectory, we made employees over to Neon in 2021, which
some key acquisitions that helped us to represents a growth of over 50% in
expand our product offerings. In 2019, we headcount. In addition to attracting the
acquired MEI Fácil (Easy Microbusiness), best pros, we want to provide our col-
the leading support platform for individ- laborators with the best possible work
ual microentrepreneurs in the country. experience and, therefore, part of these
That permitted us to launch the MEI Fácil resources will also be used towards the
bank account last year, tailored to the development of human capital.
needs of microentrepreneurs. In a single
application, microbusinesses have access With that capital, we are also leveraging
to help with bureaucracy, educational strategic areas, improving and launching
content and financial services. Through new products. Since the announcement of
a MEI account, you can for example, pay the round, we launched the MEI Fácil ac-
your monthly business taxes with one count, with solutions tailored to the needs
click, manage your bank slips and have ac- of the individual microentrepreneur and
cess to credit products - one of individual that already includes a credit card.
microbusinesses’ key complications.
We also made an important acquisi-
In 2020, we made two additional strategic tion to scale our credit offer, with the
acquisitions: Magliano, the first broker of purchase of ConsigaMais+ (Achieve
the Brazilian Stock Exchange, and Consiga- More), the largest independent payroll
Mais+, the major payroll deducted employ- deducted employee loan platform in
ee loan fintech in Brazil. The transactions the country. That way, we offer credit
still depend on approval from the Central at the lowest rates in the market, in an
Bank, but will allow Neon to expand its expedited and unbureaucratic manner.
offer of investment options and access to
inexpensive and sustainable credit.
4 • Describe the roles of the new
We want Neon to be a “one stop shop”, partners in the company, as well as the
so that the customer is not obliged type of synergy that is being generated
to turn to a conventional bank when from their expertise.
a specific need arises. We have done
enough in these four years of exis- Our investors are very present in Neon’s
tence, but there is still much to do. day-to-day and support us on various
fronts. Several of them are members
of our board. There are also business
3 • Four new investors took part in the forums in which a few d the members
last investment round in September 2020, are made up by our investors, who, with
which raised a total of BRL1.6 billion. How their experience, help us make more
are these resources being used? self-assured strategic decisions.

These resources are being used as fuel Also, because they are well-known in the
to continue the work we have been market and have an extensive network of
doing. One of our foremost investments talents, they greatly help us to attract ex-
is in human capital: we brought in 600 cellent people to our selection process.

45
 Since they play a leading role in the mar- as possible, we use a solution against
ket and also possess an extensive network attacks on web applications that
of contacts, they help us with different protects important transactions and
M&A fronts and new deal opportunities. prevents the theft of sensitive personal
data. This solution analyzes application
traffic to prevent those attacks and
5 • NEON came up with the digital ensure uninterrupted business oper-
account and payment solutions. Today ations. We also use one of the most
other services and products are already innovative biometric authentication
offered, such as credit products, solutions. The platform removes fric-
investment and business accounts. With tion from the authentication proce-
the capital raised, what types of services dure, providing high-level security with
or products are in your sights for the multifactor authentication, while main-
following launches? Is there a plan to taining superior customer experience.
invest in organic growth or seek new
acquisitions?
7. Considering your experience in the
Today Neon has a complete portfolio, financial sector in Brazil, what trends can
with all the products it needs to grow we predict in the coming years?
ten-fold in the upcoming years. So our
number one priority will be to develop Fintechs are a reality, so the major trend
and enhance the products we already is that they continue to gain market.
have. However, there are other great With the pandemic, people are increas-
opportunities to expand our product ingly digitizing every aspect of their lives,
portfolio and Neon continues to con- and financial services are no different.
sider them in its roadmap. We believe that this will tend to acceler-
ate more and more in the coming years.
In addition, M&A is a key pillar of Neon’s In addition, the pro-competition agenda
strategy and will be used in due course of the Central Bank remains very active
both for the broadening of the current and beneficial to the market. PIX Pay-
product portfolio and for ramping up ment has been launched successfully,
the launch of new products. open banking is coming and we are very
optimistic about the potential of these
new technologies and opportunities.
6. One of the major concerns of users
with fintechs is related to data security.
How do you deal with this concern and 8. 2020 presented unprecedented
what measures have been taken to challenges for everyone. How has your
mitigate the risks to customers? business been affected by the pandemic?
Comment a little on the 2020 results and
We are aware that data security is one those expected for 2021.
of the main concerns of customers
when it comes to fintechs, so at Neon, Last year was surely very problemat-
we devote a lot to always be in line with ic for the world, but from a business
the best practices of the market. To point of view it was quite positive for
mitigate our customers’ risks as much Neon. There has been an acceleration

46
in people going more digital in various
areas, whether they are shopping in
the supermarket or paying bills, for
example. People began to realize that
it is possible to solve any banking issue
by cell phone in a few clicks, without
having to go to the branch. As a result
we grew three-fold between March and
December last year. We believe this is a
one-way street: since you can solve ev-
erything without red tape and without
leaving home, why go back to the way it
was before? Our expectation is to con-
tinue at this pace and grow three-fold
once again in 2021.
In November 2020 Brazil’s Central Bank launched a state-run instant payments
platform for citizens, the private sector and government entities. Find more
information at: < https://www.globalgovernmentforum.com/brazil-central-
bank-launches-instant-payments-system-pix/>. Visited on May 10th, 2021.

47
 CVC PROFILE
ROSARIO CANNATA
Executive Investment Manager
EDP Ventures

EDP Ventures Brasil is the first investment vehicle in Brazil’s

energy sector and its strategic objective is to be the key
corporate venture capital in the electric sector also in Latin
America. Created in 2008 in Portugal and in 2018 in Brazil, EDP
Ventures is the investment arm of EDP - Energias de Portugal,
a multinational in the electric sector that has been operating in
Brazil for over 20 years, throughout the entire chain of the sector.

They seek to offer a relevant strategic and financial impact in the

EDP Group, being one of the growth tools that will ensure market
leadership in the energy transition.

1. Tell us a little about the As Corporate Venture Capital, we have

performance of EDP Ventures Brasil. already been able to show a relevant
strategic impact, given that 100% of the
EDP Ventures operates globally through start-ups backed have active supplier
4 investment vehicles distributed in Por- contracts with EDP, proving our thesis of
tugal, Brazil and Spain. Today there are 32 financial and strategic investment Inves-
start-ups in its Portfolio, which generated tor in companies that bring added value
more than 1,500 jobs, and had more than to EDP’s business units
100 million euros in portfolio earnings.

EDP Ventures Brasil is It is the vehi- 2. What kind of companies are you
cle created to invest in Brazil with opera- looking for at the moment?
tions in Latin America that, in a little over
two years of operation, created built a EDP Ventures Brasil seeks investments in
portfolio of seven eight companies both early-stage start-ups (Seed Capital)
having co-invested with the main Venture and more mature businesses (Series A),
Capital funds in the country. with a ticket of BRL 1 to 5 million.

48
Our goal is strategic: we are looking for 3. In the third quarter of 2020, you
start-ups with innovative solutions in the announced investments in Clarke
energy market, new business models and Energy and Time Energy, which
new technologies that can add value to develop tech solutions to generate
EDP’s core business and that will also pro- energy savings for the end user. Tell us
vide enhancements to the Brazilian power a little about these acquisitions and
sector in general. In addition, we also look what led to selecting both businesses.
at start-ups that can accelerate compa-
nies’ digital transformation process, such At Clarke Energia, we took part in the
as B2B/Enterprise solutions (Fintechs, round of BRL 3 million led by Canary.
legaltechs, HRtechs, etc.) that can bring Clarke helps small and medium-sized
efficiency to internal processes. enterprises to save on the energy bill
through tariff studies, energy efficiency,
Our investment priorities are aligned monitoring of consumption or energy
with EDP’s global Innovation activities purchase in the free market. Their work
and the major macro-trends in the en- has a lot of synergy with some of EDP
ergy sector such as: renewable energy, Brazil’s business areas, such as EDP
smart grids, energy storage, digitiza- Smart, a division that brings together
tion, and customer solutions. the company’s entire Portfolio of energy
solutions. The founders form a very
We are also strongly engaged in find- complementary management team who
ing companies and entrepreneurs that empowered a company adapted to the
align with our ESG practices, companies modernization of the electric sector and
that are diverse, from their founders to future changes such as market liberal-
their group of employees and who act ization in the coming years.
according to sustainable practices.
Another start-up we made an invest-
We always adopt a founder-friendly stance ment of BRL 2 million in was Time Ener-
in the governance of our investments, gy. The management team has years of
following the best international practices experience working within The Brazilian
of Corporate Venture Capital, seeking Electricity Regulatory Agency - ANEEL’s
minority stakes and avoiding any kind of Research and Development programs
exclusivity and restrictions that may hinder and its mission is to assist residential,
the start-up’s growth and agility, as well as commercial and industrial customers in
rule-out potential co-investors. accessing information and controlling
energy consumption, through an IoT
solution that analyzes all energy con-
sumption data. Our backing came in
2019, when the start-up was a finalist for
EDP’s global business acceleration pro-
gram, Starter Business Acceleration. It
was a natural fit with our investment and
customer empowerment thesis, offering
information and solutions that optimize
electricity consumption and thus im-
prove energy control and efficiency.

49
 4. As managers who have relevant newable energy have increased year over
know-how in the energy sector, how year, according to ANEEL (Brazil’s Energy
do you see the exchange of knowledge Agency) data, proving that the challenge
and synergy between EDP the is being taken on by large companies and
manager, and companies backed? by public officials and regulators.

Our goal is to support start-ups in our EDP aims to lead the energy transition
Portfolio with energy market know- in the country. To this end, it has un-
how and our business units’ support so dertaken commitments to increase the
they can scale their solution quickly. installed capacity of renewable energy
We want EDP to become a client of the (mainly solar and wind) and to reduce
backed start-ups to create a successful CO2 emissions so that by 2030, more
use-case in the use of technology in our than 90% of our energy mix is renew-
operations so that it can be replicated able and the use of coal to produce
throughout other companies in the sec- energy ceases to exist. The investments
tor and other industries, to be able to needed in new technologies are obvi-
develop a scalable business model that ously aligned with the agenda of EDP
is appealing to global investors. Ventures, which aims to be a growth
tool in the execution of this plan.
When we invest, we contribute smart
money; that is, in addition to the finan- Our Portfolio clearly shows our focus on
cial figures of our contributions, we energy transition by having companies
bring strategic insights, the possibility such as Delfos (artificial intelligence for
of joint development and access to the predictive maintenance of renewable en-
energy market, in Brazil and all other ge- ergy plants), Time Energy ( IoT for energy
ographies where EDP is present, which efficiency), Voltbras (electric mobility)
makes our value proposition very distin- and Clarke (digital energy manager).
guished and attractive to start-ups.

6. Tell us a little about your vision of the

5. One of humanity’s greatest challenges energy sector in Brazil. Which ones do
is the transition from fossil energy you point to as the main challenges?
sources to cleaner and cheaper ones,
which are increasingly accessible and Brazil is changing its energy grid at the
pose the least possible impact on the generation level to make it even clean-
environment. How are you facing this er, other renewable sources such as
challenge? Are there already criteria wind, solar and natural gas are expect-
guiding the decision-making of EDP ed to thrive in the next five years, and
Ventures, or are we still far from consumers themselves will be critical
developing these technologies on a large in this change, acting as prosumers or
scale in Brazil? both producers and consumers at the
same time, producing their own energy
Brazil has enormous potential in the through solar panel solutions.
energy transition with vast natural re-
sources playing a significant role in that At the level of consumption, there will be
transformation and investments in re- greater digitization and greater consumer

50
independence, especially when there is unicorns in recent years, proving that
a complete opening of the energy market it is possible to create Brazilian-based
where each consumer will choose his companies, but with a global scope,
or her supplier, as done with Telecomm rivaling start-ups of mature ecosystems
carriers. In Europe and the United States, such as Europe or the United States.
it is already possible for consumers to de-
termine who will be their energy provider. Even in 2020, in a pandemic scenario,
Brazil achieved record results in ven-
All these changes create opportuni- ture capital in terms of value invested
ties for innovation in the sector, mainly (US$ 3.5 billion) and investments (469),
through the investment in new technol- even exceeding the amount of the pri-
ogies, which often arises at the start-up vate equity industry, consolidating its
level. Hence the importance of EDP Ven- global position as a center of innova-
tures’ investments always trying to stay tion and entrepreneurship.
one step ahead of the significant trends
in the market. The sector’s own regulator,
ANEEL, is studying the possibility of using
R&D funds for investments in start-ups
through Public Hearing No. 74, proving
the thesis that start-ups can play a very
relevant role in the transformation that is
taking place in the electric sector.

7. As global investors, how do you view

the venture capital scene in Brazil?
What are the prospects for changes in
the medium term?

In terms of venture capital investment,

Brazil has experienced enormous
growth in the last decade. The maturing
of the investor ecosystem is visible, with
a greater appetite to diversify financial
assets in a low-interest scenario and the
start-up ecosystem producing many new

51
 Sample of local VC firms
active in Brazil

AFS Brasil FIR Capital Partners

Antera Gestão de Recursos FUNDEPAR

Gestão de Investimentos LTDA
Arena Capital
Grow+ Aceleradora
Astella Investimentos
Indicator Invest. e Serv. de Gestão
Bossa Nova Investimentos e Empresarial Ltda
Administração S.A
Inseed Investimentos
Cedro Capital
Invest Tech
Confrapar - Participações e Pesquisa S/A
Invest Tech Participações e
Crescera Investimentos Investimentos

CRP Companhia de Participações Investimage Asset Management

CSN Inova Ventures Kaeté Investimentos

Culturinvest KPTL

DGF Investimentos LGT Impact Investment

Assessoria Brasil Ltda.
Domo Invest
Monashees Capital
Dynamo Venture Capital
MSW Capital
EB Capital
Oria Capital
EDP Ventures Brasil S/A
Perfoma
Elogroup Consulting Ltda
Performa Investimentos
FinHealth

52
Qualcomm Ventures

Queluz Gestão de Recursos

Financeiros Ltda

REAG Administradora de Recursos

Redpoint eVentures

Sociedade Beneficente Israelita

Brasileira Hospital Albert Einstein

SP Ventures

Triaxis Capital

Trivèlla M3 Investimentos

Valetec Capital

VOX Capital

Wayra Brasil Desenvolvedora

e Apoiadora de Projetos

53
 Team

Superintendent
Ângela Ximenes

International Relations Consultant

Cristiane Nascimento

International Analyst
Julia Lima

Communication and Marketing Analyst

Luana de Paula

Data and Research Manager

Marcio Barea

Translation
Alessandro Barros

Text and Layout

ESTUDIO CRU

External Contributors
FM / Derraik

Partners
Fabiana Fagundes
Pedro Ferreira
Rodrigo Menezes

54
 Presented by

ABVCAP supporting members