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About investments in brazilian start-ups in 2021

Posted 2021-05-14

The year 2021 has proved to be positive for the venture capital market in Brazil. In the first four months of the year alone, the value of contributions received by Brazilian startups is already equivalent to about 70% of the total invested in the entire year 2020. Up to the moment, 2.3 billion dollars have been raised by these businesses. 

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Brazilian startups received US$ 2,35 billion in investment in 2021

The startups in Brazil raised US$ 2.35 billion in investment in the first four months of 2021. This record breaking volume is 66% of what was invested during the year 2020. In total, 207 contributions were made by the end of April this year. 

So far, the best month for Brazilian startups has been March, a period in which 57 rounds were held, equivalent to R$ 4,9 billion collected. April ended with 51 rounds and R$ 1,9 billion contributed.

The sector that received the most investments was fintechs, with US$ 731 million; followed by proptechs, with US$ 526 million, retailtechs (US$ 507 million), edtechs (US$ 222,5 million), and supply chain (US$ 215,6 million). In the month of April alone, the ecosystem raised US$ 348 million with 38 investments made.

We should also have a look at the number of Mergers and Acquisitions carried out in the first quarter. In all, 77 deals were concluded in 2021. The ecosystem has matured brutally in the last three years. Indeed, there are more spaces for innovation, more qualified entrepreneurs, executives interested in this market and new investors looking at Brazil.

According to the open innovation hub “Distrito” despite the good results, the country still tends to grow in the coming years. One of the pillars of this maturity is the investment arm. And in that it will grow a lot. Clearly, the market is not the same as it was two years ago. But there is still a lot to grow. 

Mergers and acquisitions

The market for mergers and acquisitions is also buoyant, with emphasis on the month of April. Every two days, an M&A was carried out, according to the report. In just four months, the M&As carried out in 2021 already represent 50% of the total of 2020. In this context, the main examples are the acquisitions made by Via Varejo (now Via), Celer and Magazine Luiza, which recently announced the purchase of the “Jovem Nerd” geek content.

“Our market is overheated, not only in terms of investment, but in M&A. This proves that there is much more than contributions, there are many possibilities for exits”, said Tiago Ávila, head of dataminer of “Distrito”.

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Author's post: Europartner Accounting

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