When the investment firm Monashees Capital first called Juliano Ipolito, the co-founder of an online handicrafts marketplace, he assumed that he would have to visit the firm in São Paulo.
Brazilian investment firms have traditionally had distant relationships with the companies they finance and are held in low regard by entrepreneurs.
Instead, three Monashees partners, including the co-founders Eric Acher and Fabio Igel, jumped into a car and drove in blistering heat almost 60 miles to Campinas. They spent several hours with Mr. Ipolito and his wife, Monica Ipolito, co-founder of their start-up, Elo7, getting to know them and explaining their role in developing early-stage Internet companies.
Initially, the Ipolitos “did not want to do a deal,” Mr. Igel said, because “they did not need the money and they were happy.”
But the visits to Campinas continued and the relationship grew. Recently, more than seven months after that first call, Elo7 secured Series A financing from Monashees and the American venture capital firm Accel Partners.
The deal illustrates the emergence of an Internet start-up community in Brazil. Home-grown Monashees identified the entrepreneurs, developed the relationship and early on brought in a major Silicon Valley player as a partner to make a rare early-stage investment. That change in the investor-entrepreneur relationship here comes as United States venture capital firms are starting to take notice of Brazil.
During Brazil’s rise, several economic sectors have attained global prominence, but the Internet has been a notable exception. Nasdaq does not have a single Brazilian Internet company listed, and the country’s own exchange has very few.
This is not for a lack of talent. In 2000, Brazilian professors in Minas Gerais created Akwan Information Technologies, which was acquired by Google in 2005 and became the Internet giant’s research and development center in Latin America.
But today’s entrepreneurs are starting to believe their options are wider, so they are building companies for the long haul that can rival multinationals instead of getting consumed by them. This is changing in part because of firms like Monashees.
Full article from DealBook here.