Brazil's Locaweb launches BRL 100 million fund to invest in startups

After buying several startups, Locaweb wants to connect to startups through venture capital

Fernando Cirne, Locaweb's CEO. Photo: Courtesy/Locaweb
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  • These investments will be made through an equity investment fund;
  • In this fund, Locaweb, at first, will not make investments aiming to control or significantly influence the invested companies.

In recent months, Brazil’s tech firm Locaweb has been on an acquisition spree of startups: Bagy, Octadesk, Bling, Pagcerto, Social Miner, Etus, Vindi, Melhor Envio, Connectplug, Samurai, Credisfera and Dooca Commerce, and, more recently, Squid.

Now, the technology company wants to approach startups through a venture capital fund. Locaweb announced that it has structured a
investment program in Corporate Venture Capital in which it intends to invest up to BRL 100 million.

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These investments will be made through an equity investment fund established under the terms of the applicable regulation in up to four years. The resources of this fund will be managed by Valetec Capital Investments.

According to Locaweb, in addition to the financial return expected from these investments, these initiatives can connect to the company’s ecosystem, especially in the e-commerce segment.

“In addition to the capital contribution involved in this type of transaction, these startups see in Locaweb’s ecosystem of solutions a partner capable of helping them with guidance, experience and, of course, a source of possible new customers, since the group as a whole currently has a base of more than 600,000 customers across all companies in the ecosystem,” Locaweb said in a statement to shareholders.

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In this fund, Locaweb, in the first instance, will not make investments aimed at controlling or significantly influencing the invested companies.

“We will support these startups and their founders so that they can achieve their business plan and, who knows, one day may become a wholly-owned subsidiary of Locaweb,” the company said.

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