The Brazilian startup scene has gained some serious momentum over the past two years. Unicorns have emerged. Large global investors are putting money into Brazilian companies. Venture funding in the country has skyrocketed.
Subscribe to the Crunchbase Daily
Now, one Brazilian venture firm is ready to help keep that momentum growing in a unique way.
Canary Ventures, an early-stage firm with more than $120 million under management, told Crunchbase News exclusively that it has launched a new program to help first-time founders graduating abroad kick off their business ideas in Brazil.
Dubbed JetPack, the program is designed to help people who live outside of Latin America’s largest country explore innovative ideas with a little help.
In December, Canary closed on a $75 million fund to invest in about 50 early-stage startups operating primarily in Brazil. The São Paulo-based firm generally provides the first institutional capital–seed or Series A financing–to tech companies in the country.
Izabel Gallera, the Canary partner leading JetPack’s efforts, told me there are “a lot of inefficiencies in Brazil that are much wider than in the U.S.”
The real estate, health care and financial services sectors are prime examples. In fact, those industries in Brazil have a reputation for being inefficient and expensive.
“Here we could use a lot of technology to become more efficient,” Gallera said. “Even a little bit of technology could help gain a lot of efficiencies. In Brazil, we have much more explicit opportunities of building something that can solve a real problem.”
As such, the firm is “very bullish” with regard to those market opportunities.
“We believe more capital flowing to great talent will be able to help solve a lot of problems in the country,” Gallera added.
Marcos Toledo, managing partner of Canary, said the program is being founded on the premise that Brazil is seeing a turning point where more and more talented workers “are moving away from traditional careers.”
He also echoes Gallera’s sentiment regarding opportunity in the country.
“In Brazil, we have tons of opportunities to tackle as we have a huge number of sectors that are either fragmented or low tech,” Toledo told me.
Since it began operating in 2017 through December 2019, Canary has invested in more than 60 companies which, combined, had raised over $400 million in subsequent rounds. Portfolio companies include Buser, idwall (which we covered here), Loft (whose recent $175 million round we covered in this piece), SouSmile and Hashdex.
With JetPack, Canary is looking for an ambitious team of first-time founders who live abroad and want to return to, or go to, Brazil to start a company. A formed team or being Brazlian are not requirements, but living outside of Brazil is.
Canary says its standards are high, and the firm will only choose teams if they see true potential for a long-term relationship. It will evaluate criteria such as ambition, fit with Canary’s investment model, founders market fit and execution capability.
Once a founder is chosen, Canary will invest $50,000 uncapped, which means the financing will be priced only in the next venture round. The firm will cover all LLC costs, but for future rounds a founder will need to open a company in Delaware.
The team will have office space in São Paulo during the extension of the (industry-agnostic) program or until its first funding round. Canary says it will be on hand to help when the team is ready to raise its first round of institutional venture capital. It will also provide full access to its network of tech founders and operators, talent to recruit, possible first clients (for B2B companies in particular), market specialists and enterprise senior executives, among others.
In return, Canary expects the right to lead that first venture round (assuming both parties agree). It also asks a team “to maintain a keen and exclusive focus on validating its business hypothesis.”
“We want you to focus on building a business, but don’t expect micromanagement from our side,” the firm said.
Interested parties can apply here.
Illustration: Dom Guzman