Fred Santoro’s “rocket”, ex-AWS, to assist startups seize
Between April 2020 and June this year, Fred Santoro was in charge of AWS, Amazon’s cloud computing giant, with Brazilian startups. His job consisted of approaching young tech companies that could accelerate their business.
Santoro’s relationship with startups has taken on new contours since last month. But now, on account of Raketo, which means rocket in Esperanto. It is a venture market created by the executive, now an entrepreneur.
The new company will operate helping startups that seek funds in public funding, through equity crowdfunding, or private, connecting entrepreneurs with venture capital, private equity, family offices, as well as corporate venture capital funds.
Raketo’s idea goes beyond offering a platform to trade shares. The company intends to assist the founders with strategic decisions for their businesses. Therefore, before launching their fundraising proposals, entrepreneurs will undergo mentorships with executives from companies such as AB Inbev, Google, iFood, Adobe and Linkedin.
“After the onboard startups, they go through a diagnostic process that prepares entrepreneurs for the pitch”, says Santoro, founder and CEO of Raketo to NeoFeed. At this stage, founders will be encouraged to develop new business models and correct possible problems in the operation.
To generate revenue, Raketo charges a slice of 9% of the value that the startup captures in the rounds. According to Santoro, the value is lower than the market average, which is around 15%. In addition, half of the amount absorbed will be reinvested in the newbie in question. Thus, Raketo will also become equity holder of the startups it helps.
“The account closes because we believe in the valuation of the startups with which we will work”, says Santoro. “The trick is to keep the bar high in relation to which operations we will invest. We will only bring in those that have a business model that can scale.”
The thesis for choosing startups is agnostic in relation to sectors of the economy and only considers operations early stage. “The founders’ mindset needs to be in line with ours, they need to be salespeople and transparent,” says Santoro. He also says he values entrepreneurs who base their business decisions on the use of data.
By the end of 2022, Raketo plans to help attract three startups, via equity crowdfunding: Gria, which operates with a platform focused on HR; the proptech Éleme; and Don Luiz, a DNVB that operates in the beverage market. The goal for next year is to achieve 25 startups fundraising and then double that number each year.
In negotiations in the private market, Raketo will ensure that its platform works as a marketplace for managers. Startups filtered by the venture market can be more easily found by qualified investors, which will help in the process of attracting investments.
Already in the model of equity crowdfunding, each startup can raise up to BRL 15 million, according to a resolution by the Securities and Exchange Commission (CVM). “Anyone can invest from R$5,000 onwards”, says Santoro. In the three deals made this year, the goal is to seek a capital injection of R$ 1 million for each venture.
For now, trading is done through the Divihub platform. By the end of the year, with the approval of market regulatory bodies, Raketo intends to launch its own application. The program will work in partnership white label with Divihub and will serve to facilitate investor access to companies that pass through the venture market filter.
The equity crowdfunding model has been gaining ground in Brazil. CapTable, for example, expects to quintuple in size this year. Other companies in this area are Eqseed, SMU Investimentos and Beegin.Invest.
What gave the sector a new lease of life was a change in regulation. Published at the end of April, CVM resolution 88 tripled the funding limits, previously restricted to R$ 5 million, and made the use of financial resources obtained by companies through this modality more flexible.
Financially, Raketo was born thanks to an undisclosed contribution of value made by angel investors Ricardo Wendel, CEO of Divihub; Tiago Galli, co-founder of C6 Bank; and Yan Tironi, founder of startups such as Amigo Edu, Cubos Academy and PeerBnk, and who was also an executive at Citi and Itaú BBA.
For next year, Raketo intends to seek new funding in the market to boost its own business. According to Santoro, it will be a capture of “Brazilian Series A”.
Regarding growth metrics and expectations for the coming years, the executive says that the goal is not in the number of startups that will use the platform. “The metric is the return of investors and not the money we will earn or how many startups will use the service”, he concludes.