With R$77 Billion at 38, Brazilian Co-founder of Facebook Says: “I Will Not Retire and Live on the Beach”

RIO DE JANEIRO, BRAZIL – Sixteen years have passed since Brazilian Eduardo Saverin lived the most remarkable experience of his life when he helped found Facebook in 2004, together with Mark Zuckerberg – until then merely a young computer student that Saverin met at Harvard University, where the two were studying.

At the time, Saverin invested a few thousand dollars in the venture in exchange for a 30 percent share of the business and became responsible for the financial management in the social medium’s early years. The experience earned the Brazilian the right to have two percent of all Facebook shares. Currently, the stock is worth enough to make him one of the wealthiest people in the world, with an estimated fortune of US$14.6 billion (R$73 billion), according to Forbes magazine.

At 38, Saverin is trying to put the past behind him and look ahead, now helping other new entrepreneurs create technology companies, just as he did with Facebook. Since 2009, the Brazilian has been living in Singapore and founded the venture capital firm B Capital Group in 2015, together with partner Raj Ganguly, another former Harvard colleague.

B Capital currently manages approximately US$1.4 billion and has recently captured its second fund, US$820 million, in a partnership with Boston Consulting Group. The goal now is to expand its operations and seek new investment opportunities worldwide. To date, the company has already invested in around 30 startups, the majority based in Asia, Europe, or the United States, and has just announced the first investment in Latin America, in the Mexican startup Yalochat.

In a rare interview, Saverin talked about his experience as an investor, the profile of companies he is looking at to invest in, and also his insight on the technology market in Brazil and in the world. “I hope not only to build companies that are big in Brazil for the Brazilian market, but to allow entrepreneurs from Brazil, Mexico, Latin America, to build business for the world,” he said by videoconference, talking about Singapore. “It’s time for Latin America to be the creator of great leading multinationals.”

Saverin says he is excited to invest for the first time in a company that has links with Brazil, a market he has always looked upon with affection. Born in São Paulo, Saverin moved to Miami with his parents when he was ten years old and grew up in the United States, but always maintained a special connection with his Brazilian roots.

He refrains from talking about Facebook and the years he spent with the company. But he offers his opinion about the criticism that technology giants have been getting in the United States and in Europe because of their monopoly power and their actions to prevent the emergence of competitors, hindering innovation. In late July, Zuckerberg was questioned about the matter in a hearing in the US Congress.

Saverin states that the more competitors there are in the sector, the better it will be to promote the advancement of the technology industry. But he supports Internet companies, such as Facebook, saying that their platforms help to promote such competition and innovation. Read the main excerpts of the interview below.

What has it been like to work as an investor years after being an entrepreneur on Facebook?

It’s been incredible. The possibility of working with entrepreneurs who have a real impact on the world is what moves me. Many people would ask me since I was so lucky so early in my life, why I don’t retire and go live on the beach. Sometimes, as a joke, I even leave a picture of a beach in my Zoom background (laughs). But the reality is that I really prefer to work with an entrepreneur who is building the next big technological revolution, like Yalochat, the startup we are investing in now.

The company is rebuilding the way big companies interact from scratch – either with consumers or with its distributors or intermediaries. This is gigantic. It is a tool that allows small businesses and big companies to expedite their sales and improve consumer service. It is a win-win for the world. And it enables traditional companies that are not in the technology industry to have technological advantages.

Is this the first company in Latin America you invest in with your B Capital?

Yes. It is the first Latin American company in which we invest. I have a tremendous passion for both Brazil and Latin America as a whole. And over time we hope to do more and more in the region, finding entrepreneurs and building partnerships. And I hope not only to build companies that are big in Brazil for the Brazilian market but to allow entrepreneurs from Brazil, Mexico, Latin America, to build businesses for the world. As in the case of Yalochat, is there any reason why this kind of tool does not apply also to India or the United States or Africa or any other part of the world? The answer is clearly no. It’s time for Latin America to be the creator of great leading multinationals. I humbly hope that I can be a supporter of entrepreneurs who do this. We at B Capital target investments in people who want to create truly international companies.

Your company B Capital has raised a second fund of US$820 million in June. Is the investment in Yalochat the first of this new fund?

No. We have already made other investments too. We have publicly announced that we have over US$1 billion under management. And we have made partnerships with many entrepreneurs in the world. However, this is the first that marks the beginning of the company in Latin America. We are getting closer and closer to where I was born, which excites me a lot. But we invest in multiple companies around the world.

How is the investment in Yalochat aligned to the new fund’s strategy?

It is deeply and intrinsically aligned. What I described earlier is at the core of what we do. We invest with a global perspective. The world of innovation has no boundaries, no walls. You can have an idea anywhere, like Javier Mata from Yalochat had in Latin America, and be successful in India or another country. Secondly, we believe it is important to help companies be more agile. And our fund has a partnership with the Boston Consulting Group (BCG), a major global consulting firm that daily deals with the world’s largest companies.

We work together so that our companies can expedite growth. In the end, the greatest difficulty of a startup is not necessarily to build a product. It is to conquer a market, to conquer large clients and to grow rapidly. The plan is to leverage our internal team and our partnership with BCG to help startups get there a little faster. And what’s interesting is that we like to invest in entrepreneurs who would do tremendously well on their own. Being very humble and realistic, Yalochat would succeed regardless of our investment. We are simply part of that journey.

What is the profile of startups and founders you are looking for?

I like to invest in entrepreneurs who are so passionate about what they do that they would be willing to give their best to get what they want. Someone who is deeply focused on solving a problem that their company proposes to solve. They are willing to continue pursuing this in the long term. And the entrepreneur’s ethics are also important. Secondly, it’s the kind of team the founder is bringing in. Sometimes there are terrific founders who are not so willing to build a strong team around them. And of course, we think about technology and the market.

We tend to invest in the leading startups. There are markets big enough to have two or three highly successful companies. But our trend is to try to support the leader. And, as I said before, it must also be someone who doesn’t intend to build a company solely for the local market. We believe we need to focus on what we are good at, which is to have a global first view.

What is still lacking to have more investments from you in Brazil and Latin America?

We are very interested in investing more and more in the region. Obviously, we make one investment at a time and we focus. Currently, we are focused on this partnership with Yalochat. And so we will learn continuously. No matter how Brazilian I am, I look at Brazil from an investor’s perspective, without any presumption of thinking that I know what I am doing.

We want to know the market, we want to learn. And, of course, as we learn from the entrepreneurs in the region, we will start to invest. Our philosophy – and maybe I was raised this way – is to learn from experience. We will maintain our ears ready to listen. And I don’t think I would feel complete as an investor if I hadn’t placed Brazil and Latin America as a part of the world on which I place great importance. In time, I hope to see an evolution. But let’s do it humbly and slowly.

At the start of the year, it was expected that raising capital in 2020 would be more difficult because of the pandemic, but it seems it hasn’t necessarily been that way. How have you seen the venture capital market after Covid-19?

Of course, on a broader scale, there is investor hesitation. Whenever there is a major macroeconomic impact in the world – and in this case, it’s not only macroeconomic, but it impacts each individual personally and society, transversally – there is a downturn. But the venture capital industry is often prepared to understand the changes, to persevere and to leave the other side with a positive result.

Firstly, it becomes possible to distinguish between companies that are financially secure and those that have a strategy to grow at all costs, lacking a sound structure. This helps to push the ecosystem in the right direction, to grow sustainably. Secondly, the Covid-19 pandemic has triggered the catalyst for digital adoption in the world. The digital medium was virtually what kept companies running.

And with it phenomenal opportunities for growth emerged. Obviously, I don’t like to think of the pandemic as an opportunity to make money. But I hope we will help create a positive impact in the world from this experience. The whole industry will keep investing. It will depend and vary according to the DNA of each of the venture capital companies.

In the United States, large technology companies, including Facebook, have been criticized for acting as monopolies, buying up potential competitors and preventing innovation. How have you perceived this debate?

I think the big technology companies are seeking to be innovative. And in my opinion, they have helped to create innovation in the market. The more competitors there are, the more innovation tends to emerge and the better the industry in general. And the more companies in the industry tend to grow. I know that sounds counterintuitive. But competition keeps companies in the lead and also helps them to innovate. In fact, I believe that there is a competitive environment in the world of technology today.

I can’t speak for all companies, of course. I speak from outside any of the big companies. But I believe they want to encourage competition. Because most companies are basically platforms. Since Facebook’s early days, the plan was to open their platform and allow other companies to gain projection and engagement.

And in the case of Yalochat, the company uses a very well-established messaging platform, which is WhatsApp. So these companies are better at allowing startups like Yalochat to emerge and succeed. Their platform approach enables the longevity of the business model.

Source: Exame