As the Brazilian CVC market starts to cool, Valetec is looking to diversify its business with a venture building division.
Brazilian corporate venture capital-as-a-service firm Valetec Capital has formed a venture-building arm to help corporations with business development and incubation, NeoFeed reported last week.
Valetec intends to diversify its business with this initiative – which may account for 30% of the firm’s revenue in three years – as the Brazilian CVC market begins to slow down.
“Valetec Venture Builder was created as an independent division, separated from our CVC operations, with a different team and focus,” Peter Seiffert (pictured), Valetec’s founder and chief executive, told NeoFeed.
Valetec, which helps 10 corporations manage CVC funds, has been adding two corporate venturing units and making about 30 investments per year, but Seiffert said the Brazilian CVC market is beginning to stabilise.
Deals involving CVC investors totalled R$2.2bn ($395m) in funding last year, compared to R$5.6bn ($1bn) in 2022, representing a 60% decrease, according to the Brazilian Private Equity and Venture Capital Association (ABVCAP).
In the first five months of 2024, corporate venturing investments also saw a 44.4% dip from the same period last year, reducing from R$900m ($162m) to R$500m ($90m).
Valetec Builder’s business model will be to not only charge consulting fees for helping build startups for companies, but it will also acquire a stake between 5% to 15% in the newly created companies. Sugar producers São Martinho and Usina Lins are the first two companies to hire Valetec Venture Builder’s consulting services to evaluate new business opportunities.
READ MORE:
Seiffert launched Valetec in 2006 while working at aerospace manufacturer Embraer, leading new business development as head of corporate strategic planning. The corporate appointed Seiffert as head of CVC in 2012, where he helped set up four funds before leaving seven years later to run Valetec full-time.
Valetec now has R$1bn ($180m) under management. Vibra Ventures, Neuron Ventures, Anima Ventures and Ygeia Ventures, part of biofuel producer Vibra, pharmaceutical firm Eurofarma, higher education group Anima and health benefit service Abertta, are among its clients.
The firm’s portfolio also includes LW Ventures, DX Ventures, Açolab Ventures and Amazônia Ventures, which invest on behalf of B2B digital retail platform LWSA, wood product manufacturer Dexco, steel producer ArcelorMittal and telecommunications firm Tellescom, as well as undisclosed others.
Corporate Venture in Brasil 2024 – International Delegation to Brazil
Join us in São Paulo to make invaluable connections in Brazil and Latin America at this year’s Corporate Venture in Brasil 2024 (October 28th to 30th).
