João Kepler, co-founder and CEO of Bossanova, a Brazilian venture capital firm, was beaming with smiles on March 8. He was with some partners in New York City, at Times Square, when the screen on the facade of the Nasdaq building displayed his company’s logo in celebration of a milestone for a few: 1,000 startups invested.
“We came up with a plan in 2015 to invest in 1,000 companies. We pretty much opened Bossanova with that plan,” he told LABS.
In the original plan, however, the thousandth investment was supposed to happen at the end of 2020, not March 2022. And it wasn’t even because of the pandemic, which actually accelerated the investments. “It was because we underestimated, we thought we were going to make it and we didn’t,” admits the entrepreneur.
To reach such a large number of invested startups, Bossanova has taken a well-defined strategy: to invest in startups that have just been founded.
Bossanova usually puts money into startups in the following stages:
- Angel: BRL 65,000 to BRL 160,000.
- Pre-Seed (the most common): BRL 160,000 to BRL 1.5 million
- Seed: BRL 1.5 million to BRL 3 million.
The BRL 2 million infused into Privacy Tools, the thousandth startup in Bossanova’s portfolio is an investment close to the company’s limit and, at the same time, a relatively small check in the market. In 2021, the average size of checks received by startups in Brazil was $13.7 million (about BRL 63.7 million).
“Instead of investing in a few companies with bigger checks, we decided to invest in more companies with smaller checks,” says Kepler. Bossanova works with what he calls the “option thesis”: “I’m entering with a small share, buying an option, and if this business grows I can increase [the investment], enter as a partner or even sell my share.”
Bossanova doesn’t want just any startup. On the VC’s radar are B2B or B2B2C companies with scalable, digital business models that are operating and making money.
Some are skeptical about the “spray and pray” approach of putting money into hundreds of startups, which implies a greater effort for a lower potential return. So far this thesis is working fine for Bossanova, which manages a portfolio valued at BRL 6.5 billion and has 63 exits on its resume.
So much so that the firm is doubling down on its business. The milestone of a thousand invested startups has triggered a kind of vertical expansion of Bossanova, with new business areas aimed at education, finance, and communication. In the last few weeks, Bossanova, which already had Bossa Academy, its educational arm, launched BossaBank, a bank aimed at entrepreneurs and investors, designed in the molds of Silicon Valley Bank; held the Bossa Summit, a major startup event in São Paulo; and acquired Startupi, a pioneering publication covering the Brazilian startup ecosystem.
Bossanova is turning into a hub. “We realized that, as we increase the number of startups and investors, there are added services that you have to provide to these audiences. Everything that is important for the Brazilian startup market, we will be part of it, we will be participating.
The hub is not quite ready yet. While not revealing details due to confidentiality agreements, Kepler says that the next Bossanova novelty should be announced at the end of May.
Even though Bossanova does not have a new goal for invested startups set, it continues to grow its portfolio. In the interview with LABS, Kepler gave the updated number: 1,190 startups, a growth of almost 20% just over a month after the celebration in Times Square.
To keep up the pace, Bossanova’s bet is on training new investors. In interviews with other media, Kepler expressed his intention to make his company the “XP of startups”, alluding to the XP of Guilherme Benchimol and others, which for two decades has invested in the education of Brazilian investors to leverage the brokerage house’s services.
Aware that investing in startups is high-risk and of Brazil‘s peculiarities – it is a relatively poor country where savings is still the most popular way to invest among the Brazilians –, he believes that the work of Bossa Academy and Bossanova’s hub can make a difference to change this scenario.
“A guy who doesn’t know that there is this risk [of investing in startups] can’t get into this kind of thing. Education, learning how to invest, is essential,” he says. “We are expanding our information and content business arms so that, through education, people start investing. Sort of in the same model that XP did back there.”
I ask how Kepler expects to find Bossanova seven years from now. “We’ll have already done our IPO out there,” he says smiling. “We will be bigger than many Brazilian banks, one of the biggest VCs in the world. We are the biggest in Latin America considering the number of startups; we want to be the biggest considering the size of the checks as well. We’ll have a huge market value and a lot more money to invest even bigger checks.”