You’re reading The Brazilian Report‘s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: Venture capital growing in Latin America. The 5G soap opera. And efforts against misinformation.
While still far from Silicon Valley numbers, venture capital (VC) investment in Latin American startups has grown consistently over the past few years. Despite the pandemic, Brazilian startups (which account for half of the region’s seed-money investment) raised USD 480 million from investors between January and April — the highest for the period ever, marking a 20-percent growth from 2019. Throughout the whole region, VC investment has doubled (in dollars) every year from 2016 to 2019.
Why it matters. Investors seem more inclined to choose safer bets — especially in uncertain times like these. In March, investments were reduced by 85 percent, and most April investments were linked to previous commitments. The fact that CargoX and Pet Love gathered 89 percent of resources indicates that only firms operating in specific sectors are benefiting — not the startup ecosystem as a whole.
Trend ahead? Some experts warn that venture capital could run dry in the coming months, as the coronavirus crisis deepens in Brazil. Moreover, the 45-percent devaluation of the Brazilian Real in 2020 means that it will be increasingly difficult for foreign investors to obtain returns in dollar-denominated investments. Still, it is worth mentioning that, prior to the pandemic, the trend following 2019...
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