Social impact startups lead the way in receiving contributions

The global venture capital market & investments in early stage, small or medium-sized companies, usually startups & startups & experiences a moment of expansion in the world. And Brazil stands out, leading this market in Latin America. Behind the millions of dollars, euros or reais involved in the funding rounds, are stories of socioeconomic impact generated by such investments. 

According to Venture Pulse 2024, a survey by the organization KPMG, in the second quarter of this year, the global venture capital market added US$ 94.3 billion in investments, with the highest increase compared to the previous five quarters.In Brazil, the amount reached US$ 816.8 million, the highest since the first quarter of 2022. 

According to the survey, startups focused on artificial intelligence, defense and cybersecurity lead the receipt of contributions. But data from other sources also show more segments standing out (especially those that bring social impact. The Govtech Fund, managed by KPTL and Cedro Capital, is one of those that have stood out.

The fund is directed to startups with the potential to transform the provision of public services offered by the government. The resources are contributed in projects that offer technology for areas such as health (hospital resources management, telemedicine), education (educational processes, access to quality education) and public safety (monitoring and data analysis tools), among others. 

“O Govtech Fund was created with a clear mission: to invest in technology companies that develop solutions to solve problems of a public nature, facing infrastructure bottlenecks and bureaucracy.In a country like Brazil, where millions of citizens face daily difficulties to access basic services, the role of these startups goes beyond financial returns. They represent a hope for the public administration to become more agile, efficient and transparent”, discuss the managers KPTL and Cedro Capital. 

The reports of entrepreneurs contemplated show the social impact. One of the partners and founders of Colab, Gustavo Maia, explains that the performance of the Govtech Fund made the company improve its strategic vision, “nos helping to refine our solutions and better understand the needs of the public sector”. 

Colab is the startup responsible for creating the digital version of the participatory budget, currently in use by the government of Piaui and several municipalities in Brazil. “With the support of the” fund, says the entrepreneur, “we have been able to expand our operations in more cities, and this represents a great victory for the citizen who can participate more actively and collaboratively in the public management of”. 

Prossas, a platform for monitoring and selecting initiatives to promote social actions, such as calls for culture incentives, is another startup contemplated with the venture capital fund Govtech.The company's co-founder, Thiago Alvim, defines as “decisivos” contributions received for the improvement of public notice management tools and partnerships for the third sector. 

“More than investment, the fund has brought us privileged access to networks and knowledge about the public sector, accelerating the social transformation we aim for”, he says. 

Cases like these indicate the convergence of the venture capital market with two major important movements: the ESG (environmental, social and governance) and the Sustainable Development Goals (SDGs). This is because they are contributions granted conditioned to policies promoting socio-environmental criteria and governance, directly aligned with one or more SDGs, ranging from poverty eradication to global action against climate change. 

For managers of the Govtech Fund, these issues should be considered as much or more than the invested figures and those of calculated return.“O venture capital can, yes, generate positive impact on people's lives, promoting not only financial growth, but also a revolution in the way public services serve the citizen. Ultimately, this is one of the most lasting ways to measure the true value of venture capital in the country: not only in figures, but in concrete transformations for social well-being and sustainable development of Brazil”, they emphasize.