If you are not a startup geek, you probably never heard of monashees. Founded in 2005, this Brazilian venture capital company has kept a low profile ever since. The official website only displays its manifesto, where it says that they “want to be side-by-side with the best entrepreneurs who have the talent and the courage to change our reality.”
The startups backed by monashees sure did change the business reality in Latin America. The asset management firm has played a role in some of the region’s most prominent success stories, being one of the early backers of five Latin American billion-dollar companies: Rappi, 99, Loggi, Loft, and, most recently, MadeiraMadeira. In the wake of their investees, Monashees even received a nickname itself: “the unicorn hunter.”
Focusing mainly on Latin American startups over the last decade, Monashees has backed firms in several different areas: technology, delivery, transportation, retail, fashion, real estate, and even coffee, building a large portfolio of 109 companies backed. In 2019, the company had over $3.6 billion under its management.
How monashees started?
Two investors founded Monashees: McKinsey and General Atlantic alumni Eric Acher and Fabio Igel, heir of the family that founded Brazilian fuel distribution giant Grupo Ultra. Over the last decade, more partners joined the firm, but the company itself tends to stay out of the spotlight, leaving it to the startups in which they invest.
One of the prime examples is Rappi, whose potential was discovered early on by monashees’ partners. According to IstoÉ Dinheiro magazine, in 2016, they eyeing the delivery app market. After meeting startup founders Sebastian Mejia and Simón Borrer, they flew right to Colombia to seal the deal.
In the same year, Rappi raised more than $53 million in Series A and B investment rounds, both backed by monashees alongside another major venture capital firm Sequoia. According to Mejía, Monashees also helped the Colombian startup to expand beyond the country’s borders, launching its app in Brazil, Argentina, Uruguay, Chile, and Mexico.
Monashees was also instrumental in the rise of transportation app 99 to the Latin American unicorn club. The firm invested in the startup as early as 2013, even before its main competitor, Uber, began operations in Brazil. In total, the venture capital company backed 99 in three different investment rounds, including the Series C funding where Chinese giant Didi invested $100 million in the company – in 2018, the company would buy 99 for BRL 960 million.
Monashees also invested in Loggi, the Brazilian logistics company that became a unicorn in 2019. In March, the VC firm was one of the backers on the startup’s seventh round of investment that raised $212 million from asset managers and companies such as CapSur Capital, Softbank Vision, Softbank Latam, GGV, Microsoft, Sunley House, and Brazilian manager Luis Stuhlberger’s accomplished Fundo Verde.
How does monashees pick its investments?
In over 12 years, monashees has invested in more than 70 companies, especially during its initial stages, from seed to series A and B rounds. Its criteria are based on three points: vision, competitive edge, and sustainability.
“If you don’t differentiate yourself, being just ‘another on,’ you can’t compete with giants that are already on the market,” said Acher during a keynote in the 2018 Forum E-commerce Brasil.
Speaking at another event (2018’s Credit Suisse Latin America Investment Conference), he said that monashees was the first VC firm to bring Silicon Valley’s philosophy to the Brazilian market. “We were the first who came in to invest in entrepreneurs with patience, thinking in amicable terms,” said Acher. In the same event, the investor predicted that 99 was the first of several Brazilian companies to become unicorns. And he was right.
These principles have guided monashees into investing in a wide array of economic sectors, such as used clothes e-commerce website Enjoei, backed by the VC firm in 2013 and then raised BRL 1.1 billion on its IPO seven years later. Another unusual example is The Coffee, a micro-coffee shop chain inspired by Japanese minimalism that relies on cashless self-service systems, which raised $5 million in a Series A round in 2020.
How monashees is raising stakes in the Latin American startup ecosystem
After the 99 sale, which yielded to investors a return of 60 times the amount invested according to Estadão, monashees started to bring even bigger values to its investment funds. In 2018, the firm raised $150 million for its eighth Latin American fund, bringing in partners such as S-Cubed Capital, the family office of former Sequoia partner Mark Stevens; Instagram co-founder Mike Krieger, one of the most influential Brazilians in Silicon Valley; and Singapore’s sovereign wealth fund Temasek.
A year later, the company started preparing its 9th Latin American fund, for which it hopes to raise about $250 million to expand its investments in startups.
Monashees has also set its sights on startups beyond the region, such as Estonian CRM platform Pipedrive, which was backed by the VC firm in 2018 and, two years later, became the sixth unicorn in the company’s portfolio.
This February, monashees led a series B round that raised $19 to Vortexa, a British energy startup founded by Brazilian executive Fabio Kuhn that analyses satellite data on international movement of ships that carry energy such as oil and gas.
Business aside, the company still keeps out of the spotlight, only talking about itself on rare occasions. One of them was on its 15th anniversary when the VC firm announced it would donate 1% of its performance fee to Latin American NGOs, by choice of the entrepreneurs in the company’s portfolio, according to NeoFeed. The first one was LALA (Latin America Leadership Academy), which helps develop entrepreneurial, social, and community leaders.
According to the same news outlet, rumors say the VC firm plans to expand beyond Series A and B rounds, entering late-stage investing, which supports companies that already have rapidly growing sales or fast growth potential.