With R$ 1 billion underneath administration, KPTL will increase contributions and makes a Christmas “package deal”
Amidst the crisis in the venture capital market, the manager increases investments by 50% in 2022 and announces three follow-ons this year-end at startups Ativa, Mereo and Preâmbulo Tech
In a year of decline valuations and with the technology market taken by a more conservative attitude from venture capital managers, KPTL will end 2022 investing 50% more than last year. “It was not an excellent year and one of the best we’ve experienced”, says Renato Ramalho, CEO and partner of the manager. “But it is also far from being a bad year like the catastrophe of 2008.”
This result was achieved from three new follow-on contributions that were signed between the end of November and the beginning of December and that have now been announced by the manager, as a result of the merger of A5 Capital Partners and Inseed Investimentos, which has over of R$ 1 billion in assets under management.
The “Christmas package” totaled BRL 12.7 million invested in these three startups. One of them is Ativa Soluções, which works with businesses linked to the internet of things. The other is Preambulo Tech, which has a management system aimed at the judiciary sector. And, finally, at Mereo, which owns a management tool for HR.
The operations were carried out using resources from Criatec 3, one of the ten funds managed by the manager and whose investors are the National Bank for Economic Development (BNDES) and other regional development banks. Launched in 2014, the fund already has 95% of its capital of R$217.5 million allocated.
Criatec 3’s thesis is to invest in companies in areas such as information and communication technology, agribusiness, nanotechnology, biotechnology and new materials. “It’s not just a portfolio of bananas, but a fruit salad”, says Ramalho.
Of the three follow-ons, the highest amount was invested in Ativa Soluções and corresponded to R$ 5.7 million. The startup from Minas Gerais entered the KPTL portfolio in 2020, when it received BRL 4.3 million to boost its research, development and trade in equipment and solutions related to the internet of things.
For 2023, Ativa intends to expand the scope of services. “We are going to use this money to invest in a new front, which is data science”, says Edson Rennó, founder and CEO of the startup. The expectation for 2023 is to increase revenue from BRL 40 million to BRL 100 million.
At Mereo, a startup that has a management platform focused on HR and already used by more than 200 companies, KPTL is repeating the contribution of BRL 3 million. In 2021, HRtech raised BRL 5 million in a round that included the participation of Cedro Capital.
The new investment will be allocated in marketing and sales and will also serve to reinforce the company’s cash, which was impacted by the acquisition of competitor Vaipe, in June this year. “A part of the initial capital was used for the acquisition and now we are reinforcing the strategy with the follow on”, says Ivan Cruz, co-founder of Mereo.
The investment in Preambulo Tech, in turn, was R$ 4 million. The value is greater than the R$ 3 million previously invested by the manager in the business. Founded in 1988, the startup from Curitiba has as its main product a management system aimed at the judiciary sector.
The platform, which operates in a SaaS model, has already been used by more than 30,000 users and the company currently has more than 6,000 customers in Brazil. The new capital will help to scale the operation with investors in research and development and in the platform for generating documents by guided interview. There are also plans to invest in new verticals, but which are still under wraps.
Divestments and funding
Founded in 2020, KPTL has already raised more than BRL 1.3 billion in ten funds and invested in 110 companies. With the three new operations, the manager should finish this year having invested R$ 86 million.
The value includes the contributions made by Criatec 3 and by the other nine funds that the manager operates. Currently six funds are active and another four are just in the disinvestment phase.
According to Eduardo Sperling, partner at KPTL and head of the Criatec 3 fund, although new follow-on operations may be carried out next year, when the allocation should reach 98%, the manager’s focus for the coming months will be to carry out divestments in the vehicle.
“Private equity is increasingly closer to venture capital and can be an important partner in this regard”, says Ramalho. “Other opportunities may come to the table.”
In the other funds that are in operation, all are still in the fundraising phase and the manager’s objective is to have BRL 1 billion to invest in assets from the agribusiness, forestry and climate, social impact and govtechs and web3 and crypto verticals in the next years old.
There is still a long way to go, since according to Ramalho, KPTL has raised only around R$ 100 million for now. As found out NeoFeedthe manager intends to intensify funding in the coming months with different strategies.
In terms of forestry and climate and which has the mining company Vale as its main investor, KPTL hopes to be able to raise more funds abroad. As for the agribusiness vehicle, the tendency is for Brazilian family offices to be among the main partners.
The investment thesis is focused on early stage and opts for businesses that operate in B2B – which helps facilitate an exit by selling the operation to a larger company. On average, the manager holds a 25% share of the deals it enters and the average annual growth of investees is 43%.
For 2023, the venture capital company intends to bring 12 new companies to the portfolio with contributions that should add up to R$ 60 million, in addition to another R$ 25 million reserved for follow-on operations in companies already invested in. “Next year should be very similar to 2022”, says Ramalho.
For the investor, it is necessary to worry less about the political scenario. “The climate agenda or that of agribusiness will not stop because of a president or because of a certain minister. These are agendas with global demand for investments.”