Tech

Tech Roundup: Equity crowdfunding a potential boost for Brazilian startups

The week's most important news on technology, innovation, and investment in Brazil

investment startups agtech innovation
Image: Monthira/Shutterstock

This week’s topics: Equity crowdfunding could become a new way to grow for Brazilian startups. Smaller ICT companies facing credit difficulties during the pandemic. Investment in Brazilian AgTechs surpasses USD 160 million. 

Equity crowdfunding a new growth opportunity for Brazilian startups

Equity crowdfunding is not a widely known or understood concept in Brazil. However, this form of investment — essentially consisting of a collective investment for startups and small and medium-sized companies — is gaining steam in the country and making its way onto the radars of investors and startups alike.

How it works. Equity crowdfunding consists of small and medium-sized privately held companies and startups opening crowdfunding campaigns to receive investment and grow their businesses. Investors can pledge any amount between BRL 500 and BRL 5 million (USD 990,000). 

  • “I like to think of equity crowdfunding as a mini IPO: public offerings for privately held companies, businesses that are being born, and startups, to attract investment. Each investor becomes a partner in the business and acquires a stake,” says Camila Nasser, CEO of KRIA, an industry-first investment platform.

New boom. Brazil’s Securities Commission (CVM) regulated equity crowdfunding in 2017. Since then, the amount raised through this form of financing grew tenfold. According to the CVM, equity crowdfunding generated BRL 84 million in investment last year, a 43-percent increase on the previous year. And the sector is about to experience another boom.

  • Ms. Nasser asserted that, in the next couple of months, the CVM is set to alter key points in equity crowdfunding regulations. 
  • Currently, companies with annual gross revenues of up to BRL 10 million may take part in equity crowdfunding drives, with a maximum fundraising amount of BRL 5 million. With these regulation changes, businesses with revenues of up to BRL 30 million will...

Don't miss this opportunity!

Interested in staying updated on Brazil and Latin America? Subscribe to start receiving our reports now!