By Jeanine Renosto and Layon Lopes*
It is not news that investments in Brazilian startups broke records in the first two months of 2021. In total, US $ 275.00 million were invested in Brazilian startups, which is equivalent to a quarter of all amounts received by foreign capital during the year 2020. There is still this year, the expectation that the volume of venture capital invested in startups exceeds the US $ 3.5 billion, registered in 2020, until July 2021.
The number of startups in the country with innovative and scalable ideas grows every year. According to the Brazilian Startup Association, there are around 12,727 startups in Brazil, which represents a search for angel investors to invest and build this ecosystem.
But after all, what makes a Brazilian startup attractive for investment?
The vision of investors is always very clear: they are looking for startups that create disruptive solutions that are in the development phase and with great efficiency in the market. These characteristics are present in several Brazilian startups, which also show rapid and scalable growth with innovative ideas and, in some cases, in addition to working with the technology itself, adopt guidelines of diversity and sustainability that draw the attention of foreign investors.
Another factor that impacts the investor’s decision is the dollar. The currency has been on the rise for a few months and has no downward forecast. This appreciation of the foreign currency means that investors can bet on more than one startup with values that represent more than one Brazilian startup. If compared to the realities, in Brazil, five startups could receive an investment from an investor. At the same time, in the USA, only one could receive these values.
Therefore, it is important to remember that the market for startups in Brazil is very heated and developing day after day, due to the factors presented above. In the eyes of the investor, it is better to bet on an existing business in the country, than to seek a solution that resembles these, since developing a solution would have to go through the MVP processes.
Finally, due to its low operating cost and the talents of Brazilian startups, Brazil becomes a hot spot for investments.
*Layon Lopes is the CEO of Silva | Lopes and Jeanine Renosto is a member of the Silva | Lopes team.