Welcome to our Tech Roundup, with the biggest stories on technology and innovation in Brazil. This week: venture debt has been gaining ground in Brazil in light of a more hostile environment for startups.
Is there space for venture debt in Brazil?
Brazilian startup Ativy, focused on cloud computing technology, raised BRL 120 million (USD 22.9 million) this week to expand its business in Latin America and the U.S. The operation was one of many recent venture debt cases in Brazil, an investment modality that has been gaining ground in the country in light of a more hostile environment for tech companies.
Know the term. Venture debt consists of a loan taken with an investment fund that must be repaid within a certain period, either with funds from liquidity, profit generation, or even with a new round of investments.
Pros and cons. Debt financing can help leverage startups’ growth without the founders having to dilute their shares of the company in exchange for the investment. In addition, because they are risky operations, they can provide greater returns for investors while helping startups that are willing to take...
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