The volume of angel investments in Brazilian startups dropped 20% in 2020 compared to 2019, which means a four-year setback in the volume of allocated capital. Brazilian startups received BRL 856 million from angel investors last year. The number of investors also decreased by 15%; today, there are 6,956 angel investors in Brazil. The data are from a survey carried out by Anjos do Brasil, a non-profit organization that promotes and supports entrepreneurship in Brazil.
According to the report, the reduction of the investments was driven by “passive investors”, those who are sought after by startups. On the other hand, the volume of investments made by “proactive investors”, those that looking for startups to invest in, has increased, but not enough to keep the investments at the 2019 level.
For the entity, the retreat of passive investors is a consequence of the lack of incentives for investments. Cassio Spina, president of Anjos do Brasil, defends public policies to stimulate this ecosystem. “Investment in startups needs encouragement and support to grow and reach its full potential, which we estimate to be BRL 12 billion a year,” he says.
Spina also points out the urgency for Congress to resume the debate on the equivalence of tax between startups investment and investment with incentives, an agenda not covered by the Legal Framework for Startups. “The Legal Framework did not bring the necessary advances. In the short term, we hope that the veto of Article 7 will be overturned so that at least allowed for the compensation of losses with gain.”
The survey shows that the investors’ perspective for 2021 is that contributions will increase 15% and return to 2019 levels, but, according to the organization, it is still insufficient to meet the growing market of Brazilian startups.
Regarding the sectors that most aroused the interest of angel investors, agritechs are the business preferred by 46.3% of the investors consulted. Next come edtechs (40.7%) and fintechs (40.2%).