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Microsoft and Banco Espirito Santo Create Fund to Foster Startups

17 March 2014

(Press Release) Microsoft Ventures and BESAF – BES Ativos Financeiros, through Espirito Santo Ventures, are creating a new investment fund focused on supporting young technology companies.

The fund, Brasil Aceleradora de Start-ups Fundo de Investimento em Participações (the Brazilian Startups Accelerator Investment Fund), also includes Qualcomm Incorporated, through its venture capital arm, Qualcomm Ventures, Espírito Santo Ventures and AgeRio as investors. They will start the operation with R$10m, with the potential to reach R$300m, to foster start-up companies and accelerators for entrepreneurs.

With the purpose to contribute to research and development in Brazil and to increase the national competitiveness, the investors have combined efforts to create the fund. This is a project that differs mainly for its operation with a level of startups for which there is a lack of financial incentives. It will offer investments from 120 thousand BRL to 3 million BRL, to help startups that usually don´t find support from accelerators or funds to increase their business.

Besides the investment in a different range, the selected startups will also count on a network of collaborators to speed up processes in various fronts, such as: mentorship, operational support, technological support, physical space, business networking and financial support. In addition, when the startup becomes more mature, there is also access to a fund to support the company in a second round of investment.

The fund is intended to invest in technological basis startups that can contribute to strengthen the Brazilian economy by bringing practical solutions to key areas: education, cybernetic defense and security, health, oil and gas, energy, aerospace and aeronautics, athletics, agriculture and environment, finance, telecommunications, mining and strategic technologies, as well as cloud, mobility, and high performance computing.

At first, the fund will use the Acelera Partners selection process to attract startups. Microsoft Ventures, the technical advisor to the fund, will help recommend startups and accelerators for selection to BESAF, who is responsible for the investments according to regulations.

To be selected, startups need to have an annual revenue minimum of 120 thousand BRL and maximum of 3 millions BRL. The level of maturity of the company will define the level of incentive. For startups starting their implementation, with zero revenue, there is an acceleration stage (first cycle), which will be managed by Acelera Partners. The companies which go through this stage, enter the next stage (second cycle) to prepare to receive investments from the fund, achieving a revenue of 300 thousand BRL. From then on, companies who go through both stages are qualified to apply for the investment of Brasil Aceleradora de Start-ups Fund.

“This is an unique combination that comprises a startup’s accelerator and an investment fund, which will allow the creation of real cycles of super acceleration. We want to help entrepreneurs to turn great ideas into successful companies”, says Mariano de Beer, General Manager of Microsoft Brazil. “We have a long-term commitment to innovation because we believe this is one of the factors that contribute to national competitiveness and development of the country.”

“There are many interesting opportunities in the startups segment,” said Ricardo Espirito Santo, President of BES Investimento do Brasil. “Other than the financial outcomes, the investment from the fund promotes the country’s growth. Brazil has become an important technological center for developing companies and Espirito Santo is pleased to actively support the local entrepreneurial ecosystem.”

“With today’s announcement of our co-investment with Microsoft Ventures we reinforce our commitment to fostering innovation in the mobile industry,” said Rafael Steinhauser, senior vice president and president, Qualcomm, Latin America. “We are happy to support this initiative which addresses a gap in the funding continuum for young companies in Brazil. Qualcomm supports the Brazilian developer community by fueling creativity and financial investment, technical expertise and a network of relations with other players in order to help their projects become successful.”

“The investment in venture capital at IT sector is strategic for the AgeRio’s Investment Policy. We believe that Rio has the prerequisites and entrepeneurs for development of a cluster of technology-based IT companies. The Rio de Janeiro has great prospects and has an ecosystem of Private Equity in shaping. However we have seen a large concentration of these resources for funds who have big companies on focus and we identified as an opportunity to develop new companies using Seed Capital, because there is no harvest without sowing. So we hope a positive effect throughout the chain by investing in the Fund Brazil Accelerator, because of focus and expertise of managers of Banco Espírito Santo and Microsoft as important partners” – said Claudio Moraes – Superintendent of Equity , Partnerships and Products in AgeRio.

Network of Selected accelerators and startups

Startups can benefit from the investments of Brasil Aceleradora de Startups or through Acelera Partners, a network of accelerators constituted by the fund and independent partners, who contribute to the strengthening of entrepreneurship and innovation.

The Accelerator seeks to support the creation and development of new companies with a high potential for growth, not only in the local market, but also at a global scale. Every enterprise comes from a platform of acceleration of national scope, which is already born integrated to a worldwide accelerating network, by means of the partnership established with Microsoft Ventures.

“Collaborating with key organizations to provide critical resources for entrepreneurs is important for the evolution of local startup ecosystems around the world,” said Rahul Sood, General Manager & Partner of Microsoft Ventures. “As a founder, I understand the struggles entrepreneurs go through to bring new businesses to market. Startups in Brazil have the tenacity to dream big and we are thrilled to help them turn great ideas into successful companies.”

The team supporting Acelera Partners also counts on institutions with distinctive competencies in their fields, including: technology (Microsoft and Qualcomm); finances and stock market (Banco Espírito Santo Group and Perfoma Investimentos); legal (Derraik & Menezes); and entrepreneurship and angel investment (Anjos Cariocas).

Acelera Partners starts its activities with two startups: VTX, responsible for the technical development of the Product Recognition Platform (PRP) used by some mobile apps to recognize products or other items in searches done by the camera and mobile phone images to clients as NetShoes, NetPharma, Dafiti and UOL; and Cerensa, who supports companies in the implementation, automation and management of sustainability governance guidelines (emissions of greenhouse gases, natural resources, energy and waste) for clients such as Odebrecht and CCR.