Brazilian government to provide $4 million in a fund focused on startups and a crypto-currency company is among the beneficiaries

The Brazilian Development Bank (BNDES) announces a R$ 20 million fund (about US$ 4 million) to accelerate startups and, for the first time, a company related to Bitcoin will benefit.

Brazil’s National Bank for Economic and Social Development (BNDES) will contribute an additional R$20 million (about US$4 million) to the Angel Fund to support start-ups and high-tech companies.

According to BNDES, with this second quota issue, BNDES‘ share in the fund will reach 60 million reais (about US$ 12 million).

And, among the fintechs that received the financial contribution from BNDES, for the first time, there is a company linked to Bitcoin and the cryptomontages, QR Capital.

The investment

The Fund is expected to reach approximately R$145 million (about $29 million) in committed assets, adding the Bank’s contributions to those of the private partners.

In addition, according to BNDES, the Angel Fund began in July 2019 with assets of R$76 million (US$15 million), of which R$40 million (US$8 million) came from BNDES and the rest from other investors and Domo Invest, companies selected to manage the capital provided.

Despite the crisis resulting from the Covid-19 pandemic, Domo Invest believes that the investment target of 20 startups can be achieved by the end of 2020.

In the first months of operation, managers and analysts spoke with more than 600 founding partners of start-up companies and selected 14 of them so far, four of which are in the portfolio, with a signed investment commitment.

BNDES supports innovation

According to the BNDES, the Angel Fund is a BNDES initiative that allows investment in public companies with annual revenues of less than R$1 million (US$200,000).

It focuses on the sectors of creative economy, agro-industry, health, biotechnologies, financial technologies, smart cities and information and communication technologies.

With the support of these start-ups, the Bank is working to promote capital markets for this type of investment and to stimulate the innovation ecosystem.

„The fund fills a gap in the market by providing resources in two essential phases. In the first stage, the initial investment is what allows the birth of the company.

In the next stage, startups that reach the level of a small innovative company can qualify for new capitalization to accelerate their growth. These additional investments, for each startup, can reach R$ 5 million (about US$ 1 million)“, highlighted BNDES.