Posts Tagged ‘Draper Fisher Jurvetson’

Brazil: The next hotbed of venture capital and private equity?

June 26, 2009

Yesterday, I attended a packed conference about investing in Brazil. The event, which was sponsored by the Brazilian-American Chamber of Commerce, drew more than 150 investors, executives and technologists at the Palace Hotel in New York City.

There were several good panels but the one on venture capital and private equity really caught my attention. Luiz Figueiredo, president of the Brazilian Association for Private Equity and Venture Capital, told the audience that as of the end of 2008 investors had committed $28 billion in venture and private equity capital to Brazil. That is up from $6 billion in 2004, amounting to an incredible 50% compound annual growth rate over the last four years. To date, 500 Brazilian companies have received venture capital or private equity investments, and there is $12 billion left to invest over the next few years from that $28 billion kitty.

The conference was capped by two big announcements. On June 25, the Brazilian stock exchange Bovespa hosted the world’s largest IPO of the year, a $4.3 billion offering by Brazil credit card processor VisaNet. On the same day, Boston-based private equity firm Advent International announced that it bought a 50% stake in Brazilian holding company PAP for $142 million. PAP control Kroton Educational, a fast-growing education company. It was Advent’s 15th investment in Brazil since 1997.

An April 2009 survey by Coller Capital found that investors plan to increase their exposure to emerging markets, and that Brazil’s stock was rising. In the survey, Brazil ranked as the second most attractive choice for private equity investment, behind China and ahead of India. Last year, Brazil ranked fourth.

Why is Brazil such a hotbed for investment? Figueiredo pointed to several factors. Among them: A large, stable and growing economy, a modern financial system that escaped the financial crisis, a solid and improving legal framework, a strong local investor base, and robust capital markets, including the country’s Bovespa stock exchange.

More than 50% of the growth in capital came from the nation’s pension funds. In Brazil, pension funds are allowed to invest up to 20% of their funds in alternative investments such as private equity and venture capital. “The industry is getting new money and we are ready for it,” says Figueiredo. “We are really well positioned to attract foreign capital.”

One of those new foreign investors is Draper Fisher Jurvetson. In May 2007, the Silicon Valley firm launched a partnership with a Brazil-based firm called FIR Capital. The two firms launched a $170 million fund. Marcus Regueira, a founding partner of FIR Capital who was on the panel, said that his firm is looking to invest in information technology, mining technology and agribusiness. “We’ve never had the quality of entrepreneurs that we have now,” said Regueira, a former executive at Bank of America who received an MBA from the Wharton School of the University of Pennsylvania.

Brazil has yet to produce a breakout technology startup that is a leader on the global scene. But Regueira says the influx of new capital will help the country reach that next level. As an example, he cited the experience of Akwan Information Technologies, a Brazilian search engine that FIR invested in. In 2005, Google bought Akwan Information Technologies and used it to set up a research and development center for Latin America. Regueira says Akwan and its investors had to sell the company because it could not attract more follow-on investment. Now, he says, that won’t be so much of a problem. Thanks to the flood of new capital, “now is the time to invest in Brazil.”

DFJ director Elizabeth Clarkson, who was also on the panel, predicted that the new vintage of Brazil funds will produce extraordinary returns. “DFJ was early in China,” she said. “We are looking for Brazil to be a similar experience.”

Mark Your Calendars: Stanford Entrepreneurial Thought Leader Winter 2009 Speaking Lineup

January 13, 2009

As some of you may know, I was thrilled to get an invite to speak at Stanford University’s Entrepreneurial Thought Leader Series Seminar. The weekly seminar series on entrepreneurship is run out of the Engineering School, and is co-sponsored by the venture capital firm Draper Fisher Jurvetson, BASES (a student entrepreneurship group), and the Stanford Technology Ventures Program.

The series recently posted its Winter Quarter lineup, which I repasted below.

I am scheduled to speak on Feb. 4 from 4:30pm to 5:30pm in the Skilling Auditorium. Hope to see you there.

Check out the great archive of podcasts and videos from past speakers, including presentations from Vinod Khosla, Judy Estrin and Guy Kawasaki, among other tech luminaries.

Winter Quarter Lineup Announced
2009 Winter Speaker Lineup

January 14
Skilling Auditorium
Hugh Martin
Chairman and CEO – Pacific Biosciences

January 21
Skilling Auditorium
Soujanya Bhumkar, Josh Schwarzapel, Austin Shoemaker
Founders, Cooliris

January 28
Skilling Auditorium
Teresa Briggs
Managing Partner – Deloitte, Silicon Valley

February 4
Skilling Auditorium
Spencer Ante
Computer Department – Business Week
Author – Creative Capital

February 11
Skilling Auditorium
Tom Siebel
Chairman – First Virtual Group
Founder – Siebel Systems

February 18
Kresge Auditorium
John Hennessy
President – Stanford University
Launch of Stanford University Entrepreneurship Week!

February 25
Kresge Auditorium
Debate moderated by Tony Perkins
Founder – Always On
Conclusion of Stanford University Entrepneurship Week

March 4
Skilling Auditorium
Elizabeth Holmes
Founder and CEO – Theranos Inc.