Responsible for more than a third of all capital invested in Brazilian startups last year, fintechs raised about US $ 910 million, a volume almost three times higher than in 2018 and pulled by rounds raised by Nubank (US $ 400 million), Creditas (US $ 231 million) and Neon (US $ 100 million). Since 2015, startups that innovate in the financial sector have received US $ 2.4 billion in contributions, according to a recent survey by the innovation hub Distrito.
The expectation was for another year full of funding, but the pandemic left investors more selective and discerning. However, the search for good business was not interrupted because opportunities are not lacking in the sector, according to venture capital fund managers heard by Valor. “It is a highly concentrated market, with the five largest banks that hold 85% of the assets. And people want a better experience with products, services and service ”, says Gustavo Gierun, a partner at the District.
The Ventures District - the company's venture capital arm - totals R $ 23 million invested in 21 businesses, most of them fintechs, such as Monetus (investments), BLU365 (debt renegotiation) and SuperSim (credit). According to Gierun, despite the crisis, the fintech segment will continue to grow in 2020, mainly because of regulatory guidelines such as open banking and instant payments. But the volume of resources invested should not have the same pace as in previous years.
In early stages, such as seed capital and series A, the rounds are expected to return more quickly because the most active funds in Brazil are capitalized. “The investor will be more careful at all stages. This is natural for this moment ”, explains Gierun. Romero Rodrigues, managing partner of Redpoint eventures, shares a similar view. “Since 2012, we have made good investments in fintechs and we continue to do so, but obviously the bar has gotten higher.”
With 48 startups in the portfolio, including fintechs such as Creditas, Magnetis and Antecipa, Redpoint eventures announced rounds in the last months, such as the joint investment with HDI Seguros in Accountfy, specialized in digitizing the financial area of companies. "We have not canceled any investment and we are starting to look at new investments, but without a doubt that the distance is slower," says Rodrigues.
For Flávio Dias, partner at 500 Startups in Brazil, there is a large space for business creation in the areas of payments and bank digitization. Newly arrived at the Brazilian operation of the American accelerator, one of the largest in Silicon Valley, Dias says that 500 Startups is strengthening its position in Brazil and will return to looking at business in the country in the second half. "Fintech is one of the main segments in which we will seek to invest, in addition to health, education, agribusiness and SaaS [software as a service, in English] applied to retail and the marketplace", he says.
According to Daniel Chalfon, partner at Astella Investimentos, there is an increasing number of entrepreneurs from the financial market. They are people who know how the sector works and decided to open new businesses in recent years. “I don't think we will have the same volume of entrepreneurs in fintechs going forward. We will probably have more quality ”, he evaluates.
For Arthur Garutti, partner at the innovation company ACE, fintechs with solutions for SMEs tend to attract more and more investors. With three investments made this year, ACE, with 70 startups in its portfolio, plans to make seven to ten new investments by December, with a fourth for business in the financial sector. "Our pipeline continues to run, with contributions from R $ 200 thousand to R $ 1 million."
Responsible for more than a third of all capital invested in Brazilian startups last year, fintechs raised about US $ 910 million, a volume almost three times higher than in 2018 and pulled by rounds raised by Nubank (US $ 400 million), Creditas (US $ 231 million) and Neon (US $ 100 million). Since 2015, startups that innovate in the financial sector have received US $ 2.4 billion in contributions, according to a recent survey by the innovation hub Distrito.
The expectation was for another year full of funding, but the pandemic left investors more selective and discerning. However, the search for good business was not interrupted because opportunities are not lacking in the sector, according to venture capital fund managers heard by Valor. “It is a highly concentrated market, with the five largest banks that hold 85% of the assets. And people want a better experience with products, services and service ”, says Gustavo Gierun, a partner at the District.
The Ventures District - the company's venture capital arm - totals R $ 23 million invested in 21 businesses, most of them fintechs, such as Monetus (investments), BLU365 (debt renegotiation) and SuperSim (credit). According to Gierun, despite the crisis, the fintech segment will continue to grow in 2020, mainly because of regulatory guidelines such as open banking and instant payments. But the volume of resources invested should not have the same pace as in previous years.
In early stages, such as seed capital and series A, the rounds are expected to return more quickly because the most active funds in Brazil are capitalized. “The investor will be more careful at all stages. This is natural for this moment ”, explains Gierun. Romero Rodrigues, managing partner of Redpoint eventures, shares a similar view. “Since 2012, we have made good investments in fintechs and we continue to do so, but obviously the bar has gotten higher.”
With 48 startups in the portfolio, including fintechs such as Creditas, Magnetis and Antecipa, Redpoint eventures announced rounds in the last months, such as the joint investment with HDI Seguros in Accountfy, specialized in digitizing the financial area of companies. "We have not canceled any investment and we are starting to look at new investments, but without a doubt that the distance is slower," says Rodrigues.
For Flávio Dias, partner at 500 Startups in Brazil, there is a large space for business creation in the areas of payments and bank digitization. Newly arrived at the Brazilian operation of the American accelerator, one of the largest in Silicon Valley, Dias says that 500 Startups is strengthening its position in Brazil and will return to looking at business in the country in the second half. "Fintech is one of the main segments in which we will seek to invest, in addition to health, education, agribusiness and SaaS [software as a service, in English] applied to retail and the marketplace", he says.
According to Daniel Chalfon, partner at Astella Investimentos, there is an increasing number of entrepreneurs from the financial market. They are people who know how the sector works and decided to open new businesses in recent years. “I don't think we will have the same volume of entrepreneurs in fintechs going forward. We will probably have more quality ”, he evaluates.
For Arthur Garutti, partner at the innovation company ACE, fintechs with solutions for SMEs tend to attract more and more investors. With three investments made this year, ACE, with 70 startups in its portfolio, plans to make seven to ten new investments by December, with a fourth for business in the financial sector. "Our pipeline continues to run, with contributions from R $ 200 thousand to R $ 1 million."