Impact-driven, Brazilian VC firm Positive Ventures looks for startups focused on solving urgent social and environmental challenges
Positive Ventures' co-founders: Bruna Constantino, Fábio Kestenbaum, Andrea Oliveira and Murilo Menezes

Impact-driven, Brazilian VC firm Positive Ventures looks for startups focused on solving urgent social and environmental challenges

LABS talked with Fábio Kestenbaum, Positive's co-founder, about its investment thesis, ESG, impact, and what the company plans for the next decade of investments and its fund number two

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“Our investment thesis carries a good dose of defiance.” Fábio Kestenbaum‘s quote may well sum up what Positive Ventures, a Brazilian venture capital firm focused on ESG ventures, has come to. The acronym – Environmental, Social, and Corporate Governance – refers to a set of criteria related to environmental and social governance that investors have begun to observe before putting capital into a company. But beyond ESG, Positive Ventures has a thesis for impact: taking a look at the biggest environmental and social challenges of the decade and investing in companies that use technology to solve them on a large scale.

Founded by Kestenbaum, Andrea Oliveira, and Bruna Constantino, Positive Ventures raised its first fund, BRL 55 million, in 2019. The company’s impact thesis convinced big names to invest in the fund, such as Candido Bracher, former CEO of Itaú, and his wife, environmentalist Teresa Bracher, Luis Stuhlberger, CEO at Verde Asset, and Fabio Barbosa, board member of Natura and Ambev.

Fábio Kestenbaum, co-founder at Positive Ventures. Photo: Courtesy

With the first fund, Positive invested in 12 startups with operations in Brazil, Mexico, Peru, Chile, France, and the United States. The portfolio brings together companies from different sectors that share the proposal of solving a social or environmental problem, such as Eureciclo, a marketplace for recycling credit transactions; Labi Exames, a micro hub for accessible medical exams; and Letrus, an AI-based game to improve students’ literacy. There is also a fintech focused on student loans, a social commerce startup, and health tech startups, among others. 

Like any VC firm, Positive doesn’t invest just in good intentions, but is, of course, looking for good opportunities for financial return. So far, the strategy has worked out well, with a return of about 40% per year. 

We are impact-driven, but industry agnostic. The quality of our entrepreneurs and the accelerated growth of their startups are the best argument we have for deconstructing skepticism about ESG and impact. Dissociating economic returns from social and climate justice is a false dichotomy.

Fábio Kestenbaum, co-founder at Positive Ventures

Now, Positive Ventures is preparing to raise fund number two, which has a target of between BRL 150 and BRL 200 million and already has half of the capital committed in advance by current investors. With the second fund, Positive plans to invest in Seed and Series A rounds in up to 20 startups “that want an activist fund with a long-term vision on their side,” Kestenbaum explained. 

Kestenbaum talked to LABS about Positive Ventures’ investment thesis, ESG, impact, and what the company plans for the next decade of investments:

Investment Thesis

“Investments warm or cool the climate, and perpetuate or challenge the social status quo. Investing is an essentially political act. Every penny we allocate says a lot about our ethics and worldview. With the use of technology, it is no different. Artificial Intelligence can propagate fake news or optimize the queue in a hospital. The medium is the same, the impact radically different.” 

The core of our investment thesis is to invest in emerging technologies that solve real and urgent challenges and that are at the intersection between the disruptive forces of technology, economic development, and the imperative of ethics toward people and the planet. We are very concerned about the effects of climate change. This is not just an environmental issue: climate change impoverishes and deepens inequalities.

Fábio Kestenbaum, co-founder at Positive Ventures

ESG and Impact

“It is inconceivable to think of a company today without incorporating precepts such as diversity, governance, and concern with carbon emissions. It doesn’t matter the size or the sector. In addition, thinking, acting, and being vocal about ESG is also a competitive differential, given the demands of the new generations, who will invariably be the employees, consumers, and investors of these companies. I do not believe that society and investors will be tolerant of companies that disregard social, environmental, and governance aspects. ESG must be incorporated from conception and permeate all phases of the business, but obviously put into practice with discipline, prudence, and within a long-term vision. 

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It is also important to differentiate ESG from impact. To be ESG is to have a concern for serving stakeholders, which includes paying fair wages, promoting diversity, including employees in decisions, and reducing externalities. I can buy shampoo from Natura (one of Latin America’s biggest beauty and cosmetics brands), which cares about how this good is produced, or from company X, which pays its employees poorly, exploits small extractive communities, and tests on animals. I buy my Natura shampoo and I want more “Naturas” in the world. 

When we talk about impact, we are referring to companies that are born or adopt the explicit intention of solving a serious social or environmental problem. This is the case of Letrus, which attacks functional illiteracy head-on, or Pachama, whose stated mission is to restore the planet’s biodiversity.”

It’s not just how you do it, but what you do. It’s not reducing harm or mitigating risk, but speeding up transitions. There is no merit or demerit, both strategies need to thrive on a large scale. However, in my opinion, venture capital, even by its very essence, should be more concerned with funding radical transitions – and maximizing positive impacts.  

Fábio Kestenbaum, co-founder at Positive Ventures

Emerging Technologies

“There are countless opportunities in stamped sectors such as health and financial services, but also in emerging sectors and technologies such as reverse waste logistics, renewable energy, carbon, cryptocurrencies, Web3, NFTs, Defi. In the next fund, one of the investment verticals will be dedicated exclusively to the topic of technology infrastructure and decentralized systems oriented to maximize positive impact. 

We are also very excited about models to democratize ownership. This is the case of our investment in Good Money, a digital bank that, besides not investing in fossil fuels, weapons, private prisons, etc., turns account holders into shareholders to the extent they use and recommend the bank. It was the first time that the SEC authorized this type of structure in the US.” 

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What Positive Ventures looks for in a startup

Venture capital funds seek the intersection between exceptional teams attacking real problems in large markets with businesses based on scalable models. Preferably defensible and with clear competitive edges backed by technology or intellectual property.

That said, in our case, in addition to these attributes, the founder needs to make the cause explicit and demonstrate his ability to incorporate it into the essence of what he proposes to do. 

As a bit of advice, what I say to a founder taking their first steps is “waste” time exploring the above intersection and the reason why you will succeed in building a business that aspires to be great – and in Positive’s case, great and decisive for the challenges of the decade.”     

“Always available, never annoying”

“As a fund, we adhere to the “always available, never annoying” rule. An unbeatable differential we offer is the willingness of our investors, who also “buy into the cause” and allocate a disproportionate amount of time helping our founders. We are summoned to boards and put a lot of effort into making a difference, including exercising our right to vote. And, of course, we help our ventures attract more capital; after all, as an impact-driven fund operating in one of the most unequal regions of the planet, this puts us in the spotlight of global investors with an interest in this issue. 

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There is also scientific and reputational value. We are a B-certified corporation and offer a “fast-track” to help our investees get certified – currently, 60% of our portfolio is Bcorp or is in the process of becoming a Bcorp. And we recently entered into an important partnership with J-Pal, the MIT lab coordinated by Esther Duflo, Nobel Laureate in Economics, which will produce studies on the impact of our ventures, as it did with Letrus.”

What to expect from the Latin American innovation ecosystem

“For years there was a lack of liquidity; there was simply no money in the market. The scenario changed with the fall in interest rates, inflation under control, and the arrival of multi-billion dollar funds like Softbank. Money flooded the market. Now we are at an inflection point, with inflationary pressure and high-interest rates. However, I am optimistic. 

I think we have gained maturity and will be able to do transactions that combine a dose of boldness with more logical and achievable numbers and projections. I can already see rounds going out at fairer prices, which is good for everyone. My optimism is also born out of the certainty that we are only at the beginning of the technological revolution in Latin America. While the venture capital industry represents 0.71% of the GDP in the United States, in Latin America, this percentage is no more than 0.08%. This means that many inefficiencies that penalize Latin American countries will be challenged by technology in the coming years, so I believe that the next crop of venture capital will be even more impressive. 

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In my opinion, the biggest risk we run is not liquidity or price distortions but a lack of professionals to develop and operate technology. Add to this our inability, in a globalized and remote working world, to compete for talent with other countries. We need to face this urgently, otherwise, we will always be in the rearview mirror of countries like the United States, Israel, and China.” 


“We need to improve the regulatory environment so that entrepreneurs have the right to make mistakes and the means to get back on their feet, build educational infrastructure, and provide incentives for the massive training of professionals capable of developing and operating technology. The support for academia and research, practically extinct during this government, also needs to be reborn, as does the simplification and rationality of the tax environment.” 

On a more philosophical level, I would say that it would also be important for entrepreneurs and fund managers to have more dialogue with our culture and problems. I am totally in favor of being inspired by the pragmatism and capacity for innovation and execution of countries like the United States and Israel, but I would like to see more courage, boldness, and Brazilianness in theses and business models that come to us.

Fábio Kestenbaum, co-founder at Positive Ventures