Brazilian startups have best half-year ever with US$5.2 billion in funding

RIO DE JANEIRO, BRAZIL – The venture capital market in Brazil continues to heat up in 2021, and Brazilian startups have had their best half-year ever. In the first six months of this year, the total amount of contributions received by startups in the country already exceeds by 40% the amount invested in all of 2020.

So far in 2021, US$5.2 billion has been received through 339 investment rounds in startups, compared to US$3.5 billion collected last year. The data comes from the latest Inside Venture Capital report, prepared by Open Innovation Hub Distrito.

In the list of outstanding segments that received the highest volume of investments in June, fintechs top the list with US$1.5 billion in 15 investment rounds and hrtechs, from the human resources sector, with US$220.6 million in three investment rounds.

However, in the six-month view, startups from the real estate sector ranked second on the list, just behind fintechs, with US$829.4 million and US$2.4 billion, respectively.

However, what stands out are the education and health sectors, which, despite not receiving as much capital, had the highest number of funding rounds in the semester, surpassing fintechs and real estate startups. It is believed that these sectors, along with retail, are very rich and will consolidate as extremely innovative sectors.

KING NUBANK

Once again, the financial sector has not abandoned its leadership role. Part of this good performance is also due to Nubank’s billion-dollar financing round, which raised US$750 million this semester. In the latest round, the Brazilian fintech attracted one of the most important funds in the market, Berkshire Hathaway, the holding company of billionaire Warren Buffet, which invested US$550 million in the company.

The report also highlights the investment round that payments fintech Ebanx received. In June, the company received US$430 million from Advent International.

MERGERS AND ACQUISITIONS

The report reveals a new profile for the M&A market in Brazil, showing that even small companies are going on a buying spree. More than half of mergers and acquisitions in the first half of 2021 (54%) were between or by startups, up from 34.5% in the same period last year.

According to market observers, the trend follows a natural movement, in that startups are receiving large amounts of capital and need to rely on external solutions to manage the pace of growth required and the need to hire new teams. The Hub expects to close more than 250 deals by the end of the year.

In June, 26 new mergers and acquisitions were made in the Brazilian market. Among the highlights was JPMorgan’s purchase of C6 Bank shares. The American bank acquired 40% of the Brazilian bank, but the value was not disclosed. Distrito also highlights the purchase of Brazilian website Elo7 by U.S. e-commerce company Etsy, owner of marketplaces for handmade products. The deal amounts to US$217 million.

Almost at the last minute, the hub also highlights a new addition to the list: the Gama Academy. On Wednesday, the company announced the acquisition of more than 55% of the shares in education giant Ânima, in a deal valued at R$34 billion that will see it take full control of the startup in 2026.

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