Focus Mostly on Emerging Brazilian Companies
Kaszek is reportedly looking to raise $400 million for an early-stage VC fund, which will make investments of up to $20 million, according to the WSJ. In addition, the venture capital company is also seeking $400 million for a growth fund that will make investments of up to $50 million. The new fundraising comes after Kaszek had secured $600 million in 2019.
The VC fund has performed significantly well lately thanks to the surge in business valuations of its startup companies. A first fund launched by a venture capital business, closed ten years ago, was valued at a business valuation of over 16 times at the end of February compared to the initial business investment.
Similarly, the second VC fund saw its business valuation increase almost seven times compared to the amount of capital invested, while the third venture capital fund grew by over four times. Two new VC funds will focus on Latin America, where the market cap of public tech companies represents just 2.2% of regional GDP in 2020, significantly lower than 39% in the US.
“There is so much more ‘room to grow’ here than anywhere else, so the potential is massive given we’re talking about 600 million people and $5 trillion in GDP,” said Julio Vasconcellos, managing partner at the VC company Atlantico.
Startup companies backed by Kaszek have closed some of the biggest business funding rounds in Latin America recently, with the Sao Paulo-based digital bank Nubank hitting $25 billion in business valuation after receiving $400 million in financing this year. After the funding, the fintech startup company became one of the highest-valued startups in the world.
Similarly, Mexico-based user-car startup company Kavak hit $4 billion in business valuation last year, while cryptocurrency startup company Bitso reached a business valuation of $2.2 billion.
According to Monica Brand Engel, a managing partner at VC Quona Capital, believes Kaszak co-founders Mr. Kazah and Mr. Szekasy are helping define the venture capital landscape in Latin America.
“They have taken best practices from mature ecosystems like Silicon Valley and brought that discipline to how they promote VC in [Latin America].”
While Kaszek backs Latin American companies, most of them are based in Brazil. Although the VC company invests in startup companies from different sectors, the venture capital company has recently focused on the fintech industry.
“They were also one of the first funds that showed the transition of the first generation of entrepreneurs from the dot-com era transitioning into investors and ‘paying it forward’ to the next generation, an evolutionary cycle we’ve seen for decades in Silicon Valley,” Vasconcellos adds.
Kaszek, a major venture capital company, announced it is raising roughly $800 million for two new funds in a bid to leverage the increasing interest among global investors in Latin American companies. Two new funds come after the VC made a huge success with its previous tech-focused funds.