Investments in Brazilian startups have experienced a significant decline in the first half of this year, according to a survey by business platform Distrito. In fact, venture capital investments in Brazilian startups dropped by 51.4% compared to the same period in the previous year.
The survey revealed that the number of transactions also witnessed a 63.2% decrease in comparison. In total, $778.1 million was invested in 199 rounds of funding during the first semester. This marks a significant drop from previous years, as there hasn’t been a year since the second semester of 2017 when the number of investment rounds was below 200.
The report from Distrito attributes these results to various factors, including the crisis faced by Silicon Valley Bank (SVB) in March. Since the SVB is widely used by startups and venture capital funds, its crisis has had a significant impact on the investment landscape in Brazil.
In terms of a quarterly comparison, the second quarter of this year ended with a total of $384.7 million invested in 97 rounds of funding. This figure is almost on par with the previous quarter when $393.4 million was invested in 102 rounds.
Despite the overall decrease in the first semester, the report does show a positive trend in investments. For instance, June marked the fourth consecutive month with an increase in the invested volume.
It is worth noting that investment in Brazilian startups remains crucial for their growth and development. These startups drive innovation, technology, and job creation in the country. Therefore, it is important to monitor the investment landscape and address any challenges that may arise.
Overall, while the decrease in investment in the first semester is cause for concern, the positive trend observed in later months gives hope for a potential recovery in the future. As the startup ecosystem in Brazil continues to evolve, it is crucial for investors, entrepreneurs, and stakeholders to work together to ensure sustained growth and support for these innovative ventures.
