Brazilian startups raised $484.4 million in 44 investment rounds in July, according to the latest report from the innovation platform Distrito. This volume is 35% higher than the same period in 2020 when $356 million was invested. July also had a 75% drop in the amount invested compared to the all-time record month of June, when more than $2 billion was invested in Brazilian startups.
“The venture capital market continues to grow strongly. More than the mega-rounds, the market is having an accelerated number of rounds per month, it is not an event focused only on more late-stage startups, but on the general market,” said Gustavo Gierun, co-founder of Distrito.
Among the main investments in July, Distrito highlights the $170 million for the German company JOKR, which has Daki as a representative in Brazil, the BRL 300 million for Blu, BRL 250 million for Will.Bank, $35 million for Cobli and BRL 110 million for EmCasa.
According to Distrito, the hottest sectors in July were fintech ($191.6 million), with 14 investments; followed by retail tech ($174.8 million), with five transactions; health tech ($33.1 million), also with five deals; Edtech ($13.8 million), with six transactions and, lastly, marketing tech (martech, in its industry jargon), with $2.6 million, counting only with Croct‘s round.
Towards a record year for VC investments in Brazil
This year, the VC transactions in Brazil totaled $5.6 billion in 412 contributions. Considering the investments in the same period of previous years, 2021 already exceeds last year by 386% and 2019 by 222%. Among the hottest sectors in 2021 are:
- Fintech – $2.6 billion – 93 transactions
- Real Estate – $851.4 million – 14 transactions
- RetailTech – $607.9 million – 46 transactions
- Supply Chain – $262.9 million – 17 transactions
- Edtech – $237.7 million – 32 transactions
According to Gierun, because of the digital transformation process of large companies combined with the liquidity and bargaining power of large technology companies in Brazil, the Brazilian market had 134 M&As (mergers and acquisitions) in 2021.
Considering the same period of previous years, 2021 already exceeds last year by 97% and 2019 by 294%, when 68 and 34 M&As took place, respectively.
In July, the sectors that had the most M&As deals were fintech (4), retail tech (4), and I.T. (2), with highlights including the major acquisitions of Creditas, which bought Minuto Seguros and Volanty, Loft, which bought Credpago, Lojas Renner which bought Repassa and PicPay, which acquired Guiabolso.
In 2021 as a whole, the sectors that did the most mergers or acquisitions were fintech (25), retail (22), marketing (17), edtech (9), health tech (9), I.T (7), Insurtech (5), HRtech (4) and Legaltech (4).