U.S. Venture Capital Firms Pursue Opportunities in Brazil

Given Brazil's economic growth and expanding middle class, American venture capitalists are flocking to the South American country to invest in start-ups. Many of these start-ups are e-commerce sites aimed at the country's burgeoning consumer class, offering everything from baby carriages to airfare.

On July 23, Redpoint Ventures and e.ventures, two U.S.-based venture capital firms, announced they had raised $130 million exclusively for Brazilian early-stage internet start-ups. The fund, known as Redpoint e.Ventures, is the first of its kind among U.S. venture capital firms. Both companies have already invested in Brazil, including web security provider Grupo Xango, online travel site ViajaNet, and e-commerce site Shoes4you. In July, the joint venture backed Brazilian fashion site Sophie & Juliete. Another firm, Sequoia Capital, is also exploring opportunities in Brazil and according to reports, the company may set up an office there.

Meanwhile, established Brazilian start-ups created by U.S. entrepreneurs are helping to create more opportunities for other new businesses. American entrepreneurs Kimball Thomas and Davis Smith—who started e-commerce site Baby.com.br—are giving free office space to new businesses at their offices in São Paulo. Started by an American and a Brazilian, Rio de Janeiro's 21212 incubator gives start-up entrepreneurs the ability to build a business and connect with investors. Describing current opportunities for start-ups in Brazil, 21212 co-founder Benjamin White told Inc.: "As more capital gets deployed in the consumer Internet space, it'll have a dramatic impact on how quickly the ecosystem evolves. Everyone knows the wave is coming, and if you're not in the water, you're never going to catch it."

Learn More:

• Learn about the latest U.S. venture capital investment in Brazil from The New York Times' DealBook.
• Read about American entrepreneurs creating start-ups in Brazil from Inc.