Banco do Brasil will invest US$36 million in Brazilian startups

RIO DE JANEIRO, BRAZIL – Brasilia-based Banco do Brasil (BB), the oldest bank in Brazil and one of the oldest globally, is interested in investing in innovative business models by 2022. To do so, it will advance its strategy of participating in startups.

Banco do Brasil is controlled by the Brazilian government, although, is listed at the B3 in São Paulo.

The BB’s venture capital program (funds that buy stakes in companies) is being structured to have two funds totaling R$200 (US$36) million.

The focus of Banco do Brasil will be on very new companies in the market, in the “seed” or “series A” stage, but with some muscle for growth. Segments of the financial sector, agribusiness, public sector, education, and marketing are in the bank’s sights.

According to Broadcast, the size of the two portfolios being created is uncertain, but BB’s strategy is to leave the funds with independent managers who know the innovation and startup markets.

One fund should stay with MSW Capital, a manager specialized in startups, and the other with Vox Capital, a manager specialized in impact investments. Both will be responsible for the search and selection of startups, but executives from Banco do Brasil will also have the right to give their “tips”.

The BB created a portal to attract entrepreneurs and will forward the exciting and interested companies to the managers. The conditions for participation are

• the startup needs to have revenue
• some tested product; and
• reasonable amount of clients.

Banco do Brasil is also interested in companies with synergies with the institution’s business. Commitments with governance, environmental and social issues are differentials well regarded.

Before structuring these two new funds, Banco do Brasil had already invested in three other venture capital funds, from Astella Investimentos, SP Ventures, and a portfolio from Indicator Capital, according to Broadcast.