Private Equity and Venture Capital investments total BRL 53.8 billion in 2021

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Contributions by Private Equity and Venture Capital funds to Brazilian companies reached BRL 53.8 billion in 2021, a number 128% higher than the BRL 23.6 billion invested in 2020. The data is from research carried out by KPMG and the Associação Brazilian Association of Private Equity and Venture Capital (ABVCAP).

Growth was driven by Venture Capital (VC) investments in Brazilian startups, which reached the historic mark of BRL 46.5 billion in 2021. This is the fourth consecutive year that the figure breaks a record. Last year’s volume was 219% higher than that recorded in 2020, when it totaled R$ 14.6 billion.

Technology companies linked to the financial and insurance sectors (FinTechs and Insurtechs) received 28% of the investments made in the last quarter of last year. Retailtechs, retail sector startups, received 20% of investments from venture capital funds in the same period, and Healthtechs, from the health sector, 8%.

“The numbers show that we continue to drive Brazilian entrepreneurship. Venture Capital has stood out in the face of an enormous wave of innovation initiated by the most entrepreneurial generation in our history. The “techs” are here to stay, bringing digital solutions to the most diverse markets and will continue to attract large volumes of investments”, says Piero Minardi, president of ABVCAP.

In 2021, investments by Private Equity (PE) funds fell 19% to R$7.3 billion. The drop reflects the country’s economic slowdown, as PE funds typically invest in larger companies with performance more linked to the health of the economy.

“Private Equity and Venture capital funds and managers have been relevant drivers – perhaps the biggest protagonists – of investments and the development of companies in Brazil. The lower volume of Private Equities may be reflecting a greater sensitivity to the need for structural reforms still pending and the uncertainties of the pandemic or the economic future. Even so, we noticed a lot of recent movement and a trend towards new investments, especially linked to companies or assets that pay attention to ESG practices. The performance of Venture Capital funds deserves a lot of attention and celebration, which has grown exponentially, even with more recent operations in Brazil, leveraging many businesses in different sectors and even advancing over larger and more mature companies”, says Roberto Haddad, partner- leader of Private Equity and Venture Capital at KPMG in Brazil.

In the fourth quarter of 2021, the Venture Capital industry invested BRL 13 billion in Brazilian startups, an increase of 261% compared to the same period of the previous year. Disbursements by Private Equity (PE) funds had a slight drop in the period, from R$ 2.9 billion to R$ 2.8 billion…

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