In order to understand the scenario of corporate venture capital in Brazil, the Confederation Nationale de la Industry (CNI), Mobilização Empresarial pela Inovação (MEI) and the innovation consultancy ACE Cortex conducted an unprecedented survey on the subject. The companies interviewed are part of MEI, a group of companies established in the market that invest in startups or technology-based projects, with average annual returns of more than R$ 300 million.
Corporate Venture Capital (CVC) is an investment method aimed at medium-sized companies or startups. It can be defined as an investment strategy, carried out by large companies, to buy innovative companies, from small companies -such as startups, for example- to large companies.
The card verification code is divided into two categories. Internal CVC, when a company invests in its employees. and external CVC. In this model, the company invests in another business, either by investing capital in mutual funds or by creating its own Card Verification Code (CVC).
The study brought together companies from more than 15 sectors, including technology, metals, food, chemicals and pharmaceuticals, and aims to understand the CVC scenario in the country. Of those surveyed, 49.2% reported that they have done or have done corporate venture capital activities. Among those who have not (50.9%), 10.2% report that they are preparing to implement CVC investments.
Of those who implement CVC, 59.3% do so through direct investment. The second most used vehicle for CVC investments is mergers and acquisitions. Variable income investment funds (FIP) are the third most used vehicle.
The investments of the companies that announce the implementation of CVC are concentrated in startups that offer solutions related to Industry 4.0 (14.1%), followed by investments in software as a service (SaaS) solutions (11.7%) . The third topic that receives the most investment from companies is Greentech -startups that work with sustainability- (10.9%).
The investments of the companies that announce the implementation of CVC are concentrated in startups that offer solutions related to Industry 4.0 (14.1%), followed by investments in software as a service (SaaS) solutions (11.7%) . The third topic that receives the most investment from companies is Greentech -startups that work with sustainability- (10.9%).
- Other information included in the report includes:
- Type of investment: CVC programs older than 6 years mainly use direct balance sheet investment. The newer programs, ages 1-3, use FIP.
- The difference: 48% of those surveyed who implement CVC have an internal area responsible for these initiatives. One third of companies implementing these initiatives share responsibility between teams from different regions. Only 5 companies have a structure and a manager focused on CVC.
- Number of investments: About 50% of respondents who implement a CVC have less than 5 investments and less than 3 years of experience. 55% have not yet had an investment exit, that is, they have not yet completed the entire CVC journey.
- Companies with more than 6 years of operation and that have a large volume of investments (80% of them have made more than 5 different investments) are attracted by international influence (47% of them are based abroad). and invest in domestic and foreign companies. international start-ups (60% of these).
- The companies that have less than 3 years of operation are mostly national (85%) and focus on investing in national technologies (78%). Most of the companies that implement CVC (75%) look for expanded startups, that is, with greater maturity. This trend differs from the general Brazilian landscape, which is more focused on early-stage startups. In the selection of companies based abroad, the search for startups is lower in the MVP stage (22% – 2 of 9) compared to 45% (9 of 20) of the national ones.
- Sustainability issues are a priority, especially among foreign companies: 77% of these companies invest in Greentechs compared to 30% of national companies. This move may indicate a potential growth theme in the coming years.
- Among companies investing in MVP-stage startups, Healthtech stands out in first place. In the selection of companies based in the state of São Paulo, Healthtech appears in second place. This topic follows the evolution of the topic in Brazil and abroad since the beginning of the pandemic.
- Almost unanimously, 98%, of the companies surveyed that work with CVC have at least one other startup relationship initiative.