By Sarah McBride and Esteban Israel
SAN FRANCISCO/ SAO PAULO, June 7 (Reuters) – One of
Facebook’s earliest investors has turned his attention to
a distant market with a small but lively start-up scene: Brazil.
Kevin Efrusy, the partner at Accel who spearheaded the
firm’s initial $12.7 million investment in Facebook back in
2005, has made several new investments in Brazil over the last
year or so.
Efrusy, who declined to be interviewed for this article, is
perhaps the most ambitious of a growing number of U.S.-based
venture capitalists who see opportunity in a country with a
large population, a fast-growing middle class, big growth
potential and political stability.
Redpoint Ventures and BV Capital created a Sao Paulo-based
firm, Redpoint eVentures, earlier this year. Benchmark Capital
and General Atlantic have invested in Peixe Urbano, a
Groupon-style deals site. Insight Venture Partners has invested
in several Brazilian companies, including discount-travel site
Hotel Urbano and, alongside Accel, in handcrafted-goods
marketplace Elo7.
“Venture capital is an industry that is just being born in
Brazil and the trend is that it will go very quickly from
millions to billions,” said Haroldo Korte, a Sao Paulo-based
manager at Atomico, a fund created by Skype co-founder Niklas
Zennstrom.
Last month, Sao Paulo was one of the hottest stops for Geeks
on a Plane, a series of tours organized by venture capitalist
Dave McClure of Mountain View, California-based 500 Startups.
The tour brought more than 40 tech junkies, entrepreneurs and
investors to Brazil.
There are still plenty of obstacles. The Brazilian economy
has been barely growing in recent quarters, and start-ups must
contend with high taxes, comparatively limited access to
early-stage funding, and the absence of organized programs to
foster entrepreneurship. Entr epreneurs with regional aspirations
must work in Spanish as well as Brazil’s national tongue,
Portuguese.
There are cultural barriers as well. Failure carries a
bigger stigma in Brazil than in the United States, making
entrepreneurs less aggressive, says Ted Rogers, a partner at
Arpex Capital in Sao Paulo. The community of engineers,
developers and experienced entrepreneurs is also small, if
growing.
Continued…
