We recently updated BayBrazil’s inaugural 2018 survey on the Brazilian tech diaspora in the San Francisco Bay Area.
This time we focused on tech startups that raised US$2 million or more in the past couple of years. Additionally, we mapped investment funds founded by Brazilians in the Bay Area and funds launched in Brazil that established operations in the region recently.
For the first time we registered 11 startups, founded by Brazilians and operating in Silicon Valley, that raised US$2 million in funding or more.
The total amount combined is $849 million, most rounds were raised in the past 24 months.
Leading the group in terms of both fund raising and spotlight on news outlets is San Francisco-based BREX. With its latest $150 million series C, announced on May 19th, the fintech accumulated $465 million in venture capital funding and is now valued at $2.6 billion.
Co-founder Pedro Franceschi participated in BayBrazil annual conference program on July 2nd and talked about the company’s fast growth, plans for more acquisitions and expansion to other markets, including Brazil.
Other two local fintechs have raised significant rounds.
Palo Alto-based Olivia AI, a personal financial assistant, powered by artificial intelligence, amassed $9.1M with its round of past January led by BVx.
The startup is partnering with large banks to help their clients to manage money. Although major current partners are in Brazil, the fintech’s AI/Machine Learning team is in Silicon Valley.
Co-Founder and CEO Cristiano Oliveira says that “Olivia plays talent arbitrage by recruiting top AI/ML engineers in Silicon Valley to seize the massive opportunity of transforming, through data, the financial industry in Brazil.”
San Francisco-based Meemo, a social finance app that offers personalized rewards, raised $10M in Seed funding in July, after a year-long stealth period. Co-founder André Madeira, who worked many years in the corporate world leading engineering at Snap and Google, says that the startup is a culmination of a series of skills and courage he acquired over the years.
“Leaving Brazil at the young age of 20 to grab a shot at the American Dream was my first act of courage. During my Ph.D. studies I’ve learned extreme perseverance. At Google, my peers and I learned how one should perform at the highest level engineering-wise while establishing great long-lasting connections and friendships. Snap brought me maturity as a leader and the conviction that my business partner and I could build an amazing team to help us execute on any mission we set ourselves to pursue. Finally, the hardships my family and I had to overcome in Brazil uniquely prepared me to always find solutions to seemingly impossible problems. Therefore, succeeding at entrepreneurship is rarely an easy-to-follow recipe but instead a combination of courage, skills, timing, dreams, courage, experience and execution.”
BayBrazil community got to know Olivia AI’s Co-Founder and CEO last December in our end of year event at Stanford University, and Meemo’s Co-Founder André Madeira back in 2016, when he was leading Engineering at Snap and spoke at our annual conference at Google.
Having a presence in Silicon Valley is a natural step for most Brazilian growth startups.
BayBrazil team noticed that two companies launched operations in the region after scaling their businesses in Brazil and raising significant amounts.
Founded in Curitiba by Alessio Alionço, Pipefy, a work management platform, established in San Francisco in 2018 to build a team and expand the company to address a global market for business process management that is expected to surpass $23 billion by 2024. Pipefy has raised a total of $65 million.
André Ferraz, co-founder of Incognia, a new digital identity for the mobile era, moved from Recife to Silicon Valley last year following a $20 million Series B. At the meantime, he managed to sell his previous company InLoco Media to Magazine Luiza, one of the top e-commerce platforms in Brazil.
“Leading Incognia from Silicon Valley in the midst of a global pandemic enabled us to spread the knowledge we acquire here to the entire organization much faster because of the 100% online communication between our teams that are spread across 5 cities”, says André.
“It is clear that the Brazilian tech ecosystem has truly been able to start expanding on a global basis with companies such as Incognia and Pipefy opening operations in Silicon Valley and Gympass expanding throughout Latin America, Europe, and the US.”, observes Antoine Colaço, Partner at Valor Capital Group, a cross-border venture fund with operations in São Paulo, New York and Palo Alto, which invested in both Pipefy and Incognia.
Based on our survey results, fintech startups are ahead, enjoying the highest fund raising so far. Yet, other sectors also have promising startups to be watched in the next two years.
SINAI is the first leading decarbonization software in the world helping corporations to price carbon emissions, manage carbon taxes, and ultimately, reduce emissions in a cost-effective way. Its customers include large corporations such as ArcelorMittal.
“For one customer only, we’re helping to save over $30M/year, while reducing 13% of their emissions”, says SINAI founder and CEO Maria Fujihara, a Y Combinator alumni living in San Francisco, who just raised a fresh $3.8M seed round
Arena, a cloud-based marketing platform for live experiences raised a $2.3M seed round led by Romero Rodrigues, of Redpoint e.ventures and other Silicon Valley investors.
“We empower media companies to take back ownership of their audience from social networks and grow their community”, says founder and CEO Paulo Martins, “our clients include Microsoft, Fox Sports, Globo, Rogers Telecom. We are growing five times faster now because of the pandemic”
Following the $2.1 billion record amount in venture capital invested in Brazil in 2019, a surprising result of the BayBrazil study is the unprecedented number of investment firms in Silicon Valley led or founded by Brazilians, a total of seven.
The newest is Palo Alto-based Tau Ventures, a 17M seed fund focused on applied AI investing in the U.S. and Canada. Co-founder Amit Garg, a Brazilian living in Silicon Valley for 20 years, and partner Sanjay Rao worked at Google and Microsoft, have started companies, and worked together at $10B AUM Norwest Ventures a decade ago.
“We started Tau because we saw a fundamental shift for companies to use artificial intelligence to solve some of humanity’s biggest problems. As such we have bet on startups using computer vision to detect cancer, deploying machine learning to discover antibodies against covid, building robots that can make your food faster, and building cybersecurity solutions to protect your data”, explains Amit.
A pioneer in the group mapped by BayBrazil investing from pre-seed through Series A is OneVC, whose inaugural fund of $30M targets 1st and 2nd generation immigrants that tackle multi-billion dollar markets with solid product-market fit.
According to Co-founder and General Partner Pedro Sorrentino “the function of more Brazilians doing business in VC in Silicon Valley is a function of the growth of the asset class itself”.
Two other São Paulo-based firms have expanded their operations to the region.
A few months ago, Murilo Johas Menezes, Partner and Chief Investment Officer at Positive Ventures, opened an office in Palo Alto to invest in businesses that solve some of the world’s social and environmental challenges with technology. The firm raised $4.8M of a targeted $12M fund.
Indicator Capital, founded in São Paulo in 2014, started its operations in Silicon Valley two years ago when Managing Partner Fabio Iunis de Paula moved to Mountain View to work as “a liaison between new technologies and best practices from Silicon Value and the acceleration of adoption of digital transformation opportunities to the Brazilian Market”.
The firm was recently chosen by Qualcomm Ventures and the BNDES to manage a US$30 million IoT fund.
In our conferences, meetings, and day-to-day programs with BayBrazil’s hub we’ve noticed an increasing number of tech executives, engineers, product development experts who work in Silicon Valley corporations and are also venturing into angel investing.
“I see angel investment as a way to connect with great people and get involved with more innovative products and ideas outside my regular work”, says Rodrigo Schmidt, the first Brazilian engineer hired by Facebook in Menlo Park. Today he is Sr. Engineering Director at Instagram and Board Member at Loggi.
“One of the best parts of working in tech is having a chance to work with very talented and entrepreneurial people. Over time, some of the people you work with may decide to build their own companies and invite you to invest. That is exactly how I made my first investment: betting on people that I liked to work with and I knew were talented”, says Vicente Silveira, Product Manager at WhatsApp, who has headed engineering teams at Uber and LinkedIn, among others.
Beyond cash, the most valuable assets of Brazilian angel investors in Silicon Valley are their knowledge, industry expertise and unmatched experience in navigating large companies that were startups themselves not too long ago.
Avanish Sahai, BayBrazil and HubSpot board member, has held leadership positions in various high tech organizations and grown multiple businesses. Currently he is Vice President at Google Cloud team to accelerate our ISV/Apps partner ecosystem across horizontal and vertical categories.
“I decided to do angel investing a few years ago as a way to both be exposed to new ideas and also to support entrepreneurs and help them in their journey. My focus is only on what I know: investments in SaaS/enterprise software; due to my cultural background I’ve had the opportunity to invest in companies in Brazil, India and the US/Canada.”
Likewise, Rodrigo also does not target only Brazilian startups. “My main thesis is that smart tenacious founders will find creative ways to solve hard problems and it’s worth investing in their potential. Being Brazilian, I get some extra exposure to other Brazilian founders but I don’t over-pivot toward that. I also think a lot about the extra value I can add to the company besides the money as it gives an extra edge for them to succeed and makes the whole experience of being involved much more fun.”
Two common traits among angels in BayBrazil’s network are passion for technology and belief in its power to positively impact the world.
“I like to invest in areas that are benefitting from the introduction of new technology platforms. For example: I’ve invested in industry automation and mobile commerce as a consequence of my belief in the transformational effect of modern AI and mobile platforms respectively”, says Vicente Silveira.
“During these years, I’ve been bitten by the many Silicon Valley bugs: entrepreneurship and venture investment. Although nascent, my angel investment has helped me understand the world a bit better, the challenges of entrepreneurship, and the belief that one person with a dream can truly change the world”, says André Madeira.
All founders and tech executives I mentioned above have been featured in BayBrazil’s events in the Bay Area over the past several years. Many participated in the annual conference 2020, attended by over 7,500 people. Recordings at our Youtube page
Founder & CEO of BayBrazil
With my thanks to Daniela Goto, for her help with data collection, and to Caroline Romancini and Elaine Saito, for their help with the programs, I mentioned above.