After a record-breaking 2021 in Brazil, both in terms of investments and the number of new unicorns, the bets about 2022 have already started: in the “Unicorn Race 2022” report, the innovation platform Distrito puts 14 Brazilian companies in the running and predicts that another seven may get the unicorn status in 2023.
Considering that the first Brazilian unicorn of 2022 – digital bank Neon, which was valued at $1.4 billion after raising a $300 million round led by BBVA – was in the report, the stakes seem hot.
To get to this list, the Distrito considered data and growth metrics, the size of recent funding rounds – startups that have raised more than $100 million in any round, indicating that it may reach unicorn status in the next round –, and prospects for new funding.
Meet the Brazilian startups most likely to become unicorns in 2022:
To keep an eye on in 2023:
Distrito also pointed out three startups that may be the underdogs: isaac, Hash, and idwall. According to the Distrito, the three did not figure in the official betting list because they were not selected by the methodology applied, however, the platform assesses that these companies have innovative business models in their sectors and may surprise.
All together, the 2022 unicorn aspirants raised more than $1.8 billion in investments. When looking at the sector, most of the aspirants are fintechs, such as A55, Cora, Conta Azul, and Contabilizei; followed by e-commerce/retail, with names like Shopper and PetLove, focused on products and services for pets. Health and education, two other areas that caught the attention of investors last year, are also represented with Alice and Descomplica.
“Financial services and retail continue to lead the list, but we see interesting growth in other areas. This shows a maturing of the market, which sees opportunities on several areas, and of the Brazilian startups as well, which are getting more trust from investors,” said Gustavo Gierun, CEO of Distrito.
A new generation of unicorns
The report also shows that Brazilian unicorns seem to be entering a new generation. The “first-generation” unicorns, which reached status by 2019, grew at the beginning of venture capital fundraising, when few international funds were looking at Latin America. The unicorns that came next, starting in 2020, rode the wave of an already consolidated market.
Now, the performance of the startup and venture capital ecosystem in 2021 suggests the beginning of a new phase, in which growth is even more aggressive and companies reach a $1 billion valuation in shorter time periods – like Merama, which became a unicorn after less than a year of operation.
“Younger startups have found a scenario that is increasingly favorable to disruption. VC funds, established companies and scale-ups are increasingly investing in startups. Even traditional sectors, such as education and health, are being more open to tech solutions and are going digital. The consumers themselves are already used to finding new services and products on a daily basis. And the leading companies have already understood that innovation needs to be a continuous and permanent process and that, by connecting with startups, evolution happens faster,” Gierun said.