Usually stemming from investment banks or investors with deep pockets, venture capital (VC) is a type of private equity used to finance promising, budding businesses. Throughout the last half-decade, the
has been growing around the globe, regardless of stage. This upward development is highly visible in Latin America, where the
has increased by approximately 820 percent since 2016, after remaining relatively stable in the four years prior. Taking a closer look, over half of the
have targeted Brazilian startups. This makes Latin America's largest country in terms of area and population also the regional market leader in VC.
Brazil’s startup sensation
Venture capitalists tend to invest in small and nascent businesses, which they believe have potential for successful and sustainable development. In eight years, the
number of startups setting up shop in Brazil has increased by more than five times. Now venture capitalists have a plethora of innovative businesses to pick and choose from in the South American country. The two
leading economic sectors are education and finance, with over eight percent and nearly six percent of the nation’s startup ecosystem operating in these specific areas, respectively. However, startups focused on property technology (also known as PropTech) are the ones receiving the
most funding through VC investments.
Making an exit
Startups and other flowering enterprises at times rely on VC to have a fighting chance at profiting in their segments, but VC investors themselves are also looking to make a win. When venture capitalists decide to harvest the fruits of their investments, they can opt to exit from the business. The
values of venture capital exits in the South American country have increased fourfold since 2016, reaching over 20 billion Brazilian reals in 2019. One of the preferred exit strategies is that of mergers and acquisitions (M&A), where either two similarly developed companies merge or a larger business acquires a smaller one. While Brazil was home to only two
M&A transactions back in 2011, a whopping 44 M&As were reported in the 2020, reflecting once again the booming VC and startup market in the country.
This text provides general information. Statista assumes no
liability for the information given being complete or correct.
Due to varying update cycles, statistics can display more up-to-date
data than referenced in the text.
