Business

2020 has a record number of Brazilian startups' mergers and acquisitions

So far, the adtechs and fintechs sectors have attracted the most interest from large corporations in 2020, says Distrito's survey

Loft's co-founders (from right to left) João Vianna, Florian Hagenbuch and Mate Pencz.
Loft's co-founders (from right to left) João Vianna, Florian Hagenbuch and Mate Pencz. Loft is a firm that acquired Invest Mais this year. Photo: Loft/Courtesy
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  • 100 M&A of startups were carried out over the last nine months;
  • In September of this year alone, were 21 acquisitions registered.

2020 is the year with the largest number of mergers and acquisitions of Brazilian startups: in all, 100 M&A of startups were carried out over the last nine months. This is what a survey carried out by Distrito Dataminer, a market intelligence arm of the Distrito, shows.

“This market was already quite heated and the pandemic ended up bringing new opportunities. Innovation within large companies is a more costly and time-consuming process. When acquiring startups, corporations give agility to this process and get ahead of their competitors,” said Gustavo Gierun, Distrito’s co-founder. So far, the adtechs and fintechs are the segments that most attracted the interest from large corporations in 2020. Each segment registered 15 acquisitions this year.

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In September of this year alone, there were 21 acquisitions. The accumulated volume in the year is already 58.7% higher than the entire year of 2019, when 63 acquisitions were made. Among the main buyers, Distrito highlights Pixeon, that acquired BoaConsulta, Magazine Luiza, that acquired AiQFome, and Loft, which bought Invest Mais to expand its mortgage offer. The second half of the year accumulated the major part of the M&As:

M&A numbers per month in 2020. Graph by LABS with Distrito’s data.

Venture capital numbers

In addition to investments coming from M&As operations, Brazilian startups also received $843 million in funding coming from venture capital firms in September – an amount 65% higher than the one registered in September last year. In the year, the accumulated figure has already reached $2.2 billion, distributed in 322 rounds.

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Among the main rounds held throughout September there is one of $300 million for fintech Neon and another of $225 million for the e-commerce platform VTEX. Together, these rounds account to approximately 62% of the total volume invested in the month.

Pulled by these two funding operations, the fintech and retailtech sectors were the most representative ones. Other sectors that stood out in the month were regtech, which moved $109 million, and foodtech, which received $25 million in funding.

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“If we consider only the first three quarters, 2020 is behind only 2019. In this year, the first nine months accumulated $2.2 billion, against $2.3 billion in 2019. The venture capital market in Brazil remains busy and liquid, even in the face of the pandemic”, points out Gierun.

READ ALSO: Angel investment in Brazilian startups exceeded BRL 1 billion in 2019, but 2020 may be a setback

Considering all 322 fundraising operations carried out in the first three quarters of this year, Distrito notes that most of the investments are concentrated in the early stages (Angel, Pre-Seed, and Seed). There are 245 in total.

However, when it comes to the volume invested, the largest part is in the late stages (Series A – G and Private Equity). More than 90% of the invested capital ($2.1 billion) is concentrated in these stages.