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Investing in Tech Markets in BrazilCopyright @ 2013 Monashees Capital
This presentation can not be reproduced, saved or transmitted by any mean - electronic, mechanic, copy, recording or any other form - without Monashees Capital’s permission. This document is the structure of a presentation and is incomplete without oral comments and
discussion.
2
+ Founded in 2005
+ US$ 135 M in capital
commitments
+ 7 partners
+ 27 companies
+ Target sectors include Mobile,
Marketplaces, e-Commerce,
SaaS, EdTech, FinTech,
Healthcare
+ Focus on leading Seed & Series A
rounds, reserving capital for
Series Bs
+ Co-invested with Accel,
Benchmark, Felicis, Insight,
Meritech, Tiger, Valar, 500
Startups, Flybridge, Valiant,
Thrive, Intel Capital, Social +
Capital, among others
3
Timeline of tech VC industry in Brazil
“Nuclear Winter” “Boom” “Correction”
20122005 2009
“First wave”
New local investors
2000“The Burst”
2013
You are here
New localaccelerators
First generation of internet companies
Early internet investors International investors
…
Funded startups
4
MARKETS TEAMS LIQUIDITY
What really matters
5
Large domestic market
Sources: FGV, World Bank, Business Monitor International, Brazil Central Bank, Monashees’ analysis
GDP
[US$ Trillion, 2011]
2002 2012
49.0%
27.0%
38%
52%
13.0%21.0%
Consumption power
Se-ries1
15.0
7.3
5.9
3.62.8 2.5 2.4 2.2 1.9 1.8
2nd Largest beauty market
4thLargest
automotive market
5th
Largest clothing market
2nd Largest pet
supplies market
B2C: 200 M people
B2B: + 5M companies
2002 2012
49%
27%
38%
52%
13%21%
Upper class
Middle class
Lower class
3rd Largest
computer market
On average they invest 5.5% of revenues in IT
For the first time, emerging
middle class that can afford
to buy tech
products & services
Leadership in relevant markets
6
3%
6%
Far from plateau
Sources: eMarketer, New Media Trend Watch, Google Think Mobile Research, Ibope, ebit, Monashees’ analysis
Internet
[% of the population, 2012]
E-commerce
[% of total retail, 2012]
Smartphones
[% of population, 2012]
Online ad spending
[% of total ad spending, 2012]
46%
78%
88.5Minternet users in Brazil
15%
50%
7%
28%
28.5MSmartphones in Brazil
US$11.3B
ecommerce sales in
Brazil
US$3.3B
Spent on online ads in Brazil
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Large underserved tech markets
Sources: Monashees' analysis
Enterprise tech
E-commerce EduTech
Real Estate
220K brokersMost properties are not online yet
Jobs 80M of operational employees, lack of solutions to recruit these professionals
Services
75% of the employment is in services sector. Information asymmetry makes it hard to match customers and services providers
Mobile FinTech
Marketplaces
Invest-ments
US$ 1 tri AUM only mutual funds, on average Brazilians only use their banks and invest on traditional products
Insu-rance
US$ 10B market, online accounts for less than 5% of the transactions
Credit US$ 1 tri in credit, huge information asymmetry between banks / companies / consumers
Profes. Educa-tion
2.6M students talking online professional coursesLack of top-quality alternatives
TestPrep
12.7M people taking standardized tests, lack of intelligent and scalable solutions
K12 300K K12 schoolsUrgent need to improve quality and efficiency
Mobile-first
28.5M smartphones, the Brazilian AppStore and Google Play lack top localized alternatives
Feature phones
Feature phones and pre-paid plans still dominate the market, 76% and 80% penetration respectively
Furni-ture
US$ 20B market, lack of an alternative with good quality, design and accessible price
Home impro-vement
US$ 25B markettop 10 players accounts for less than 10% of the market
Desin-terme-diation
US$ 6B only apparel market, by cutting the middle man, it is possible to create affordable and aspirational brands
SMBs +5M companies, mostly underserved by technology. Only 26% use any kind of SW for mgt.
Enter-prise
Only 36% of the companies have an ERP and only 27% have a CRM
SaaS 77% of companies will increase their investments in SaaS in the next 2 years
Mobile payment
The proportion of purchases made from mobiles phone is strikingly small, below 1% of total online sales
8
Brazilians embrace innovation, specially social - 2nd most Facebook and Twitter users in the world (41.5M and 33.3M respectively)