New York - If the startup winter was marked by a scarcity of capital, the current moment is the beginning of a new investment cycle, characterized by companies that have matured, learned to manage cash flow, seek profitability, and maintain growth even with limited resources.
“Today we have many mature companies, in an advanced stage of governance, capital structure and business model,” says Thiago Maceira, head of technology at Itaú BBA, to NeoFeed .
This is a more robust ecosystem with entrepreneurs from diverse backgrounds. Foreign investor interest remains steady, not explosive.
According to Maceira, Brazil is seen as a large market, with ongoing digitalization and a naturally early adopter population, a characteristic driven by structural inefficiencies that force innovation, such as Pix.
The Itaú BBA executive points to three verticals with strong potential in the next 12 to 24 months: customer service automation, automation of processes such as onboarding and credit, and the use of data to generate insights.
On the other hand, sectors such as e-commerce and marketplaces are already consolidated, dominated by large players like Mercado Livre, Magalu, and Amazon, which reduces the space for new niche initiatives.
In this interview, Maceira states that the "winter" is behind us and, although high interest rates still make risk allocation difficult, there is capital available for good deals - proof of this are the four fundraising rounds carried out by the bank itself this year.
Read below the main excerpts from the interview:
How would you assess the current situation in Brazil for these investors?
The ecosystem went through an initial growth phase, from 2019 to 2023, with digitalization attracting investments. The pandemic brought an intrinsic need for deregulation, which gave it a boost. Then, we had what's called the "tech winter" abroad – a capital shortage that forced Brazilian entrepreneurs to better manage their companies and seek profitability.
What was the result?
The Brazilian ecosystem did this very well. The vast majority of companies continued to grow, becoming profitable and generating cash. We went through an almost complete cycle. Today, entrepreneurs have companies that are much more mature in terms of management and understanding of their own business.
Why have foreign investors become interested in Brazil again?
Foreign investors look at a country with a huge GDP that is still halfway through its digitalization journey – Brazil is probably at about halfway to what we see in China and the United States. And Brazilians are, by definition, early adopters of technology, both in B2B and B2C. This combination is powerful: a large market, a large population, a large economy, a moderate level of digitalization that will accelerate, and a population accustomed to trying new things. This is especially true because Brazil has very inefficient value chains: Brazilians don't innovate because they like to, but because they need a better solution. I heard an American investor say: "It's much harder to innovate in the United States because things work well." Pix is an example. It was created because everything else wasn't working.
Is this interest exploding now?
I don't think it's an explosion, it's continuous. All the investment in artificial intelligence in the United States somewhat diverts the focus from emerging markets, but it's positive to see continued interest. We already have several funds based here or on the West Coast that frequently monitor Brazil, always getting to know the entrepreneurs.
Which segments are of most interest right now?
Over the last two to three years, there has been a significant shift. In the first phase, there was a lot of investment in B2C, i.e., the end consumer. Today, there is much greater interest in B2B, from enterprise to small and medium-sized businesses . Interest in companies focused on the end consumer has decreased because they require significant scale and investment, and there are already successful players. In B2B, there is still a lot of room for growth.
What has caught your attention the most?
A second theme is the whole area of data analytics and data applications – investors are very interested. Brazil continues to attract a lot of interest in the fintech world; we have developed a super complex and sophisticated ecosystem, with many good companies. In fact, Brazil remains the only region in the world where the money allocated to fintech is proportionally the highest.
And there's no interest in new technologies?
Yes, there is a renewed interest in what we call new technologies. Companies in Latin America, and Brazil in particular, are creating AI applications or AI solutions – this has attracted a lot of investors. It's difficult for Brazil to have many foundation model companies because the necessary investment is enormous, but there is a gigantic opportunity for AI application. I have visited many companies and I am surprised by the degree of creativity and advancement in the application of AI in everyday life.
Are there any examples of companies?
I'll give examples of areas, so as not to offend anyone. The first is customer service , customer relationship automation. There's a lot of cool stuff coming, with bots and AI. The second is process automation – onboarding , know your customer, documentation, credit – where we're also seeing a lot of cool things. Finally, there's a strong use of data to transform it into insights. And here there will be a great race.
In what sense?
Most companies have already structured and organized data in the last five years, but now, if they haven't done so, they need to. These three areas are already making rapid progress, with companies focused on specific verticals creating solutions. I think we'll see good news in the next 12 to 24 months.
Is this your thesis for this period, or are there others?
Here at the bank, we have quite extensive coverage. Almost ten years ago, we decided to position ourselves prominently in the technology sector, creating a dedicated group. Today, we serve more than 1,500 startups within the bank, with specialized services. We have clients in fintech, agritech, healthtech, ERP, software, B2C, marketplaces; everything. We are able to have a comprehensive view of the sector as a whole. We don't have a preference or specific focus. Most of the discussions today are focused on vertical software – there's a lot happening, some trying to position themselves because of the risk of AI, others because of the opportunity. But software activity in Brazil should continue, and so should fintech.
What has been left behind and no longer attracts attention?
One area that has already seen significant consolidation is e-commerce. Between 2015 and 2023, e-commerce exploded. Today, it has become a very large-scale business – we see far fewer small niche companies. You have Mercado Livre, Magalu, Amazon, and the Asian players coming in. These are very large players. We see fewer initiatives in this area. The initiatives are more focused on merchant integration and consumer interaction. The world of marketplaces is following the same path. Brazil has become a large market, and this is a multi-scale market.
About three years ago, people were talking about a liquidity crisis, but not an opportunity crisis, even though startup valuations were stretched. What has changed?
Brazil goes through cycles. I like to look at what we're producing in the real world. We're creating companies that solve real problems. At some point, people talked about a bubble, but 60% of what I do today – delivery on iFood, shopping on Shopee or Dafiti, accounting for my small business using Brazilian management software, payroll software – all of that is handled by Brazilian companies. We're solving real problems. Regardless of whether the market is hotter or cooler, that won't change. I look at those who have been covering the sector for 15 years: the level of maturity and sophistication of the companies is different now. We have several founders in their third or fourth year of experience, who are now investors in other companies.
What lesson can be learned from those who were there in 2015?
There's no comparison. I look back at 2015 and joke: how optimistic I was about that sector? It was almost prehistoric times. That makes me very optimistic.
What are the challenges for the coming years?
Brazil still has significant shortcomings in efficiency and productivity. Our biggest challenge for the next four years, regardless of the government, is to increase productivity. And the sector that will enable this is technology. If we continue to provide access to capital – venture capital, growth capital – we have a lot to contribute to Brazil. From the perspective of the real economy, the impact of the technology sector will grow significantly. I find it inconceivable that the technology sector is so underrepresented on the Bovespa stock exchange. We will see some increase in the alignment between the sector's importance to the economy and its role in the capital markets and M&A – M&A is already a large part of this. I remain very optimistic.
What has this startup crisis proven?
It proved that we can navigate more turbulent waters. Entrepreneurs learned a great deal. Today I have entrepreneurs who are much more grounded and understand the business better. The market is more solid. We built foundations by going through a large cycle, which will allow for growth. I am more optimistic than before. The truth is that everyone came out unscathed, the boats are functioning, corrected, moving, rowing hard. The Brazilian market has room to double and triple in the coming years.
Have we definitively emerged from the startup winter?
I'm not a big fan of catchy phrases. Clearly, we're no longer in winter. Today, there's access to capital for good companies. It's not yet a time when the market is 100% good, but for those with good businesses, we can get capital. It's a moment of stabilization. There's still room for improvement, but as long as we have these interest rate levels, allocating venture capital is difficult – the opportunity cost is high. There's still some capital scarcity, but it exists and is flowing. For good businesses, you have access to capital – unlike in winter, when nobody could raise capital. We ourselves closed four funding rounds this year, a good number, with more in the pipeline.
What is, or will be, the role of M&A?
More and more, mergers and acquisitions will become relevant. I said this to NeoFeed [ on the "Coffee with Investor" program ], I was a little off about the timing , because I thought it would be faster, but we are clearly starting to see consolidation. Strategic international investors are making investments in Brazil, and national players are consolidating. In the United States, it's already common practice. As part of the maturation of our sector, we will see many mergers and acquisitions for economies of scale, synergy, and profitability. We are in the normal circuit.
In recent conversations with foreign investors, has anything surprised you enough to make you rethink any of your investment thesis strategies?
What surprised me was the level of anxiety I saw on the West Coast regarding artificial intelligence. I've rarely seen that level. It's a double anxiety: on one hand, there's a need to invest in and participate in this revolution. There's an insane demand. On the other hand, there's intense concern about which current investments will suffer from AI. Today, the priority for most financial and strategic technology players is how to position themselves in this AI world.
In Brazil too?
This will quickly come to Brazil. We're already seeing discussions, various panels talking about AI, and Brazilian companies already reacting. We're in the first minute of the first half. There's a lot to come, a transformative effect. Since we have inefficient value chains, there's no problem in starting from scratch, redoing, restarting. It's time to rethink the business. I was surprised by the level of anxiety because we always see excitement about new technologies, but this is beyond that. Most likely, in the next two years, we will see a quota of Brazilian companies understanding the impacts on their businesses, positioning themselves, and facilitating the use of AI throughout the Brazilian economy.
