Despite a slow-growth economy, Brazilian startups are closing a historic year.
As of October, venture capital funds surpassed US$6 billion, a record-breaking amount, with fintechs attracting most of it.
With an extensive track record in agricultural credit, Martha de Sá leveraged her relationships with the fintech ecosystem to put VERT Capital among the top social and green bond issuers in 2021.
In our conversation she explains how she managed to substantially expand the company in the midst of a pandemic and reflects on her work with traditionally male-dominated sectors while having a predominantly female executive team.
BayBrazil: What is VERT Capital and how does it work with financial, agricultural and real estate sectors of Brazil?
Martha: Launched in 2016, VERT is a financial services company in Brazil focused on debt capital markets infrastructure. We are an enabler of fintechs, agri and real estate companies and also any company targeting to fund their ecosystem through embedded lending. Our view is that when it comes to lending, long term funding strategy is as relevant as client acquisition. In practical terms, we structure the deal, we service the portfolio, we bring the investors and we seed early stage portfolios. In a market that growths exponentially, this model allows our partners to grow at their own pace. It is really amazing to see partners going to the capital markets at the same time many of them are generating positive environmental and/or social impact. We take this ESG agenda very seriously and were among the top social and green bond issuers in 2021. We are a founding signatory of IFACC (Innovative Finance for the Amazon, Cerrado and Chaco), launched in the COP26 in an initiative led by UN Environment Programme, Tropical Forest Alliance at World Economic Forum and The Nature Conservancy.
BayBrazil: Rural producers can use VERT’s credit platform to finance purchase of agricultural inputs. How does VERT use technology and what makes its platform different from banks and other players in the market?
Martha: We started 10 years ago structuring the first CRA (Certificate of Agribusiness Receivables) public offering and selling to individual investors with credit insurance. It was a real disruption at the time! After working on several input financing structures with Syngenta, Bayer, Sumitomo and other top crop protection companies we realized this model was really hard to scale (biggest deal was of BRL 400M in an annual BRL 300 billion market). At the same time, newborn fintechs were scaling rapidly with technology. We then “merged” what we had learned from both worlds and launched DuAgro in 2020 (a JV with XP, Inc) to finance inputs to small and medium farmers – today rural credit and the chain (suppliers and input retailers) represent the main sources of funding in Brazil and we believe that the capital markets can play a much important role, just as in more developed markets. The regulatory framework – launched of electronic CPR (farmer security), CRA in USD, Fiagro (agribusiness investment fund) – together with open banking, PIX, agenda BC# allow a much easier credit scoring and a better financing experience.
BayBrazil: We met in 2019 when you participated in the BayBrazil’s Week program. At that time Vert had about 40 employees, today it has 130+. Tell us about the market demand in Brazil and how you managed to expand so quickly in the midst of a pandemic.
Martha: It’s true! I have never imagined this scenario. We were just a securitization company working on transactions for the agri and real estate companies based on individual investor’s tax exemption. We had our first lending fintech clients (Creditas, Geru, Rebel) and realized we were transforming ourselves into an infrastructure provider. We then invested in different licenses (in order to be instrument agnostic as in Brazil we have many debt instruments and vehicles), technology and kept independent. Embedded lending expanded our client base and today almost every company has potential do be our client – from SaaS to vehicles’ rental . Our growth was mostly driven by fintechs and startups (over BRL 7 billion issued in more than 60 transactions). In 2021 we have done more than one transaction por week and today we have more than BRL 28 billion issued and managed. Having a great team and a strong culture was essential.
BayBrazil: Your company has a rare founding team: three female entrepreneurs. And, the executive team is composed mostly of women. What are some lessons learned in operating in traditionally male-dominated sectors with a predominantly female team?
Martha: It is not easy, especially in the agri. It seems you need to prove yourself all the time and the bar is always the highest. Once I had to tell a farmer that I had no older male boss to come with me. I was the one he was going to meet. You need to believe in what you say and do and today I can say that “the girls from VERT” are perceived as professionals and entrepreneurs. We believe that diversity is rich and different people think better when they are together. So having men in the executive team is also relevant ;) Gender gap is not our reality and I wish we could contribute to its end. Making women believe they can follow their dreams and just do it is a real pleasure.
BayBrazil: Thank you for being member of BayBrazil and for traveling all the way from São Paulo to attend our Latin American summit. Obrigado!
Martha: Thank you BayBrazil and congratulations, Margarise, as you are also a female entrepreneur! Let’s work to change the statistics that solo woman founders and all-women teams raised just 2% of all VC dollars.