Corporate Venture Capital Investments in Brazil (Spectra Investments)

Summary

• The analysis covered data from 83 Corporate Venture Capital (CVC) programs and 586 investments in Brazil or by local corporations abroad.p.1
• The peak for creating new programs occurred in 2021-2022 with 40 companies making their first investment in startups.p.1
• 69% of investments were made in partnership with Venture Capital (VC) funds, while 31% occurred where the CVC was the sole institutional investor.p.1
• Fintechs led startup investment sectors with 24% of contributions, followed by SaaS at 11% and Marketplaces at 9%.p.2
• 34% of investments were directed toward companies in sectors without a direct relationship to the main activity of the CVC.p.1
• The average internal rate of return (IRR) of CVC funds analyzed is -10%, with a median of -12% and top quartile return of 2%.p.1

Key insights

1. 40% of Brazilian CVC programs rely on specialized professional asset managers as full managers or co-managers.p.3
2. Fifteen CVCs made direct investments into VC funds to broaden reach and pipeline diversity.p.4
3. Among the allocation profiles analyzed, 44% show an innovative profile, 36% an independent profile, and 15% a traditional profile.p.4
4. Internationalization remains minimal, with 4.5% of investments made outside Latin America, focused mainly on hardtech and deeptech.p.4
5. Only two deeptech startups received CVC investments within Brazil.p.4
6. Independent investments suffer lower negative IRR rates (25%) than co-investments, but only 10% achieve an IRR above 25%.p.6
7. Co-investments with younger VC managers generated 3% of deals with an MOIC above 10x.p.6
8. Out of mapped exits, 23 startups were acquired directly by their backing CVC, representing 34% of all exits.p.7