It is still too soon to say that the venture capital sector in Brazil overcame the pandemic crisis. However, as the numbers from innovation platform Distrito disclose, 2020 so far has been bringing some good news for the startup ecosystem in the country. In May alone, $ 36 million was invested in Brazilian startups through 18 investment rounds. Comparing to the same month last year, this represents an 80% growth, when $20 million was invested, also through 18 deals.
“In general, it’s too early to say that it [the venture capital sector in Brazil] has been little impacted [by the pandemic] but we see a positive outlook for the coming months. All the main investor managers have funds capitalized and are eager to keep making investments,” Tiago Ávila, Head of Dataminer at Distrito, explains.
“On the other hand, we see that the rounds with higher values tend not to happen anytime soon, largely because of the preference of the largest startups for raising funds with better valuation conditions in the future. Something that wouldn’t happen now,” he adds.
The HRtech Gupy, psychology platforms Zenklub and PsyAlive, as well as the fintech a55 were highlighted among the main deals in May. With $1.3 million (BRL 6 million) raised in a recent round led by Neuron Ventures, PsyAlive CEO Fabiano Carrijo tells me that these resources will be used for expansion and new product improvements. “Argentina is the next step,” he reveals.
The online mental health startup works with large companies, within the range of 500 to 1,000 employees, and has on these B2B contracts its main revenues driver. According to Carrijo, before March, the company had about 4 million people covered [users that not necessarily made a consultation, but have access to the platform through companies and healthcare operators] by the service in Brazil.
Now, this number has jumped to 9 million, and PsyAlive expects to end 2020 with 15 million beneficiaries in Brazil, as well as 10 million in Chile – where currently, it has 7.5 million. In addition, 400 thousand is the actual number of people that have already used the platform for psychological consultation since PsyAlive was born, in 2016. “With this round, we want to place representatives in each country. We already operate B2C in Latin America, now the focus will be the B2B vertical,” the executive adds.
“Most of the deals that happened in the first semester had already been negotiated for some time, since we know that, on average, the fundraising period lasts from 3 to 6 months,” Distrito’s expert ponders, regarding the impact on the venture capital market. “Another alternative to look at is also to understand that some deals are announced, and consequently accounted for after the effective period that the investment occurred.”
M&A deals gain ground
Acquisitions have also surpassed last year’s numbers in the country, as 35 deals, against 30 in 2019, have been spotted by Distrito in these first five months of 2020. In May, Brazilian fintech Stone announced the acquisition of the healthtech Vitta, while another five deals took place in Brazil.