Latin American Tech Investment Sees Significant Growth

The technology and venture capital landscape in Latin America has experienced substantial growth in recent years. An increasing number of global investors are now providing funding to startups within the region.

Investment isn't limited to direct company funding; it also extends to venture funds themselves.

Volpe Capital Announces $80 Million First Close

Volpe Capital has recently announced the first close of its fund, totaling $80 million, with a focus on high-growth technology investments throughout Latin America. SoftBank, BTG, and affiliates of Banco Inter are serving as key anchor investors.

The fund is aiming for total commitments of $100 million, with a hard cap set at $150 million. A significant anchor investment was also contributed by Volpe’s management team.

Fund Leadership and Background

The fund’s founding partners – Andre Maciel, Gregory Reider, and Milena Oliveira – are based in Sao Paulo, Brazil.

Maciel previously held the position of managing partner at SoftBank’s $5 billion Latin America innovation fund. He initially launched Volpe in 2019, largely with support from SoftBank. Reider brings experience from his prior role as an investor at Warburg Pincus.

Maciel stated that the fundraise was “significantly oversubscribed with firm commitments” and is considered to be “among the best capital raises for a first-time fund in its asset class in Latin America.”

Investment Strategy and Timeline

Volpe Capital intends to invest in approximately 15 companies over a period of two and a half years. The anticipated average investment size is around $5 million.

To date, the fund has invested in Uol Edtech, a subsidiary of Grupo Uol, which is focused on innovating the digital learning experience in Brazil.

“We are in no rush,” Maciel explained to TechCrunch. “Capital preservation is a priority, and we are prepared to capitalize on market cycles through a patient approach.”

Targeting Companies Not Actively Seeking Funding

The fund’s strategy centers around identifying companies that aren’t currently in the process of raising capital.

“We aim to invest in businesses that haven’t necessarily begun fundraising when we initiate contact,” Maciel clarified.

Stage and Investment Flexibility

The fund maintains a flexible approach, considering both early-stage and later-stage investment opportunities, as well as primary and secondary investments.

It seeks to support early-stage companies valued at under $50 million, alongside established, high-growth companies. Their initial investment in Uol Edtech represents the latter, with EBITDA margins exceeding 30%.

Sector Focus and Avoidance

Volpe plans to steer clear of capital-intensive industries, even those within the technology sector.

“These are better suited for investors with greater financial resources than Volpe,” Maciel noted.

Instead, the fund is concentrating on investments in edtech, healthtech, software, and fintech (excluding credit-related ventures).

“We favor sectors that are ripe for disruption in Latin America and necessitate local adaptation,” Maciel said. “Considering the current state of the venture capital/growth industry in Latin America, a generalist approach is most advantageous.”

Support from SoftBank and Inter

Marcelo Claure, CEO of SoftBank International, describes Maciel as a highly valued founding partner at SoftBank in Latin America.

“We are pleased to be an anchor investor in Volpe and anticipate a continued strong relationship,” he stated.

João Vitor Menin, CEO of Inter, a publicly traded Brazilian fintech platform with a market capitalization exceeding $7 billion, highlighted Maciel’s leadership in an investment within Inter’s platform through SoftBank. He also acknowledged Maciel’s “valuable contributions” as a board member.