Documento Interno e CONFIDENCIAL – Versão #2
Current Startup Current Startup Environment in BrazilEnvironment in Brazil
DGF Inova / DGF Inova / DGF Investimentos DGF Investimentos
IDCEE ConferenceIDCEE ConferenceOctober, 11th, 2013October, 11th, 2013
Patrick [email protected]: +55 11 3521 3700www.dgf.com.br
2
Documento Interno e CONFIDENCIAL – Versão #10
Introducing DGF Investimentos – Practice Areas
DGF BIOENERGY 1
Status: InvestingSize: R$ 300MVintage: 2009
DGF GROWTH 2Status: RaisingSize: R$ 300MVintage: 2013
DGF GROWTH 1Status: Invested
Size: R$ 100MVintage: 2007
Mid
Siz
ed
Com
panie
s
Sect
or
Speci
fic
Inn
ovati
ve S
tart
-ups DGF Early Stage
1Status: ExitingSize: R$ 22MVintage: 2002
DGF Early Stage 2
Status: LaunchingSize: R$ 50MVintage: 2012
GROWTH CAPITAL
3
Documento Interno e CONFIDENCIAL – Versão #10
Leading Brazilian Firm: Founded in 2001 by the former president of ABVCAP (Sidney Chameh), DGF is
one a leading pure play growth Private Equity firm in Brazil, with 4 funds and AuM of U$ 300M
Seasoned Investment Team: The senior team has worked together for more than 10 years, having
invested in 27 high growth companies with >15 exits
Value Added and Network: DGF invests in growth opportunities in small to mid sized companies,
partnering with outstanding entrepreneurs and adding core capabilities and value
Proven Track Record: Team has achieved very positive and consistent results (IRR and MICP)
Leading Brazilian Firm: Founded in 2001 by the former president of ABVCAP (Sidney Chameh), DGF is
one a leading pure play growth Private Equity firm in Brazil, with 4 funds and AuM of U$ 300M
Seasoned Investment Team: The senior team has worked together for more than 10 years, having
invested in 27 high growth companies with >15 exits
Value Added and Network: DGF invests in growth opportunities in small to mid sized companies,
partnering with outstanding entrepreneurs and adding core capabilities and value
Proven Track Record: Team has achieved very positive and consistent results (IRR and MICP)
Introducing DGF Investimentos – Highlights
Import / Export Software
Tax Software Developer
CRM Software Developer
IT Infra-Structure Outsourcing
Exits Portfolio
Software for mobile ticket sales
B.I. Solution for Healthcare
On-demand printed products
Corp. Expanse Mngt. Software
Telecom R&D Outsourcing
4
Documento Interno e CONFIDENCIAL – Versão #10
CRITERIA & DIRECT SOURCING
Criteria (“sweet spot”):
STAGE – Revenues of U$1-3M with proven business cycle and profitability potential
BUSINESS MODEL – Consistent and with attractive dynamics (recurring revenue, etc)
GROWTH – Potential >U$50M revenues in 5yr
TEAM – Stellar entrepreneur and team
INNOVATION – Innovative company
TICKET – Invest U$1-5M per company
EXIT – Clear exit opportunities
Sample Investment Theses:
Enterprise mobile software platforms
High-growth Cloud & Saas plays (long-tail)
SaaS solutions to drive on-line customer acquisition for small and medium companies
Highly scalable web platforms in healthcare
Business Intelligence applications
Value-added distribution of virtual goods (retail)
Introducing DGF Inova: Criteria &
Pipeline
SNAPSHOT
Pipeline Status since launchU$25M fund launched in January 2012
913 companies analyzed
2 investments completed
Direct-sourced projects (from 30% to 70%)
Segment Representation among top prospects:
E-Commerce infrastructure: 18,5%
Cloud/SaaS: 15,4%
Web 2.0 / Internet Advertising: 13,8%
Health-Web: 12,3%
Mobile: 10,8%
Financial Technologies: 7,7%
IT-enabled Services: 6,1%
Online Media: 6,1%
Education: 4,6%
Other: 4,6%
5
Documento Interno e CONFIDENCIAL – Versão #10
The DGF Inova Fund has one institutional investor, plus 36 personal
investors. The group includes many of the “who’s who” of startups in
Brazil (2/3), as well as super-angel value-add investors from the USA
and EU:
Serial entrepreneur in financial technologies, and one of top angel investors in
Brazil
Founder and CEO of leading tax software in Latin America
Founder/CEO of leading import/export software in Brazil
Co-founder of Mercadolibre
Founder of Brazil's leading student loan company
California-based CEO and investor in 30+ ventures
Founder of Submarino.com and serial entrepreneur / investor
3 Angels in NY and Madrid with >100 investments in Brazil, Russia, India,
Turkey, and USA
Founder/CEO of Brazil's leading digital photo startup
Introducing DGF Inova – Value-Added LP Base
6
Documento Interno e CONFIDENCIAL – Versão #10
Myths Worth Dispelling:
VC investing in Brazil is similar to VC in Silicon Valley
(Risk of “One Size Fits All” Approach)
The moment for good VC Investments in Brazil has passed
(Risk of “Following the Herd”)
Topics: Current Venture Capital Market in Brazil – “One VC’s ViewPoint”
7
Documento Interno e CONFIDENCIAL – Versão #10
Dispelling Myth#1: VC investing in Brazil is similar to VC in Silicon
Valley
YES – Bring Insights from a Mature into a Maturing Market
Sector-specific support for global technology companies
Increase direct sourcing and specialization
Best practice / governance at global levels
NO – Use the Same Investment Approaches
Only “proven models” are worth investments: great local and BRIC-
specific business models
“Spray and pray”: portfolio company monitoring is more
demanding
Pay US-valuations: exit markets command different valuations
Assume follow-on investors will “be there” for good companies:
don’t be so sure – better be ready for follow-ons
Good companies will find exits: Again don’t be so sure. Best to find
companies with multiple paths to exit, and help them reach
significant scale
One VC’s ViewPoint – Risk of “One Size Fits All”
Approach
8
Documento Interno e CONFIDENCIAL – Versão #10
Dispelling Myth #2: The moment for good VC Investments in
Brazil has passed
Local VC eco-system has matured: specialized law firms, etc
Critical mass has been reached for companies to “hit it out of the
park” –consumption (e.g. mobile phone users), entrepreneur quality,
cloud software take-up, etc
Slowdown of “hype” is already creating interesting investment
opportunities (leaders emerging from overcrowded startup segments;
more “prudent” investments)
One VC’s ViewPoint – Risk of “Following the
Herd”