The global venture capital market – investments in early-stage, small or medium-sized companies, usually startups – is experiencing a period of expansion worldwide. And Brazil stands out, leading this market in Latin America. Behind the millions of dollars, euros, or reais involved in funding rounds are stories of socioeconomic impact generated by such investments.
To the numbers, to get a sense of the scenario. According to Venture Pulse 2024, a survey by KPMG, in the second quarter of this year, the global venture capital market totaled $94.3 billion in investments, representing the largest increase compared to the previous five quarters. In Brazil, the amount reached US$ 816.8 million, the highest since the first quarter of 2022.
According to the survey, startups focused on artificial intelligence, defense, and cybersecurity lead in funding received. But data from other sources also show more segments standing out – especially those that have a social impact. The Govtech Fund, managed by KPTL and Cedro Capital, is one of the standout ones.
The fund is aimed at startups with the potential to transform the delivery of public services provided by the government. Resources are invested in ventures that provide technology for areas such as health (hospital resource management, telemedicine), education (educational processes, access to quality education), and public safety (monitoring and data analysis tools), among others.
"The Govtech Fund was created with a clear mission: to invest in technology companies that develop solutions to solve public issues, addressing infrastructure bottlenecks and bureaucracy. In a country like Brazil, where millions of citizens face daily difficulties accessing basic services, the role of these startups goes beyond financial return. They represent hope for public administration to become more agile, efficient, and transparent," say managers KPTL and Cedro Capital.
The accounts of the supported entrepreneurs highlight the social impact. One of the partners and founders of Colab, Gustavo Maia, explains that the Govtech Fund's involvement has helped the company improve its strategic vision, "helping us refine our solutions and better understand the needs of the public sector."
Colab is the startup responsible for creating the digital version of participatory budgeting, currently used by the government of Piauí and several municipalities in Brazil. "With the support of the fund," says the entrepreneur, "we managed to expand our activities to more cities, and this represents a great victory for the citizen who can participate in a more active and collaborative way in public management."
Prosas, a platform for monitoring and selecting social action promotion initiatives, such as cultural incentive grants, is another startup supported by the Govtech venture capital fund. The company's co-founder, Thiago Alvim, describes the contributions received for the improvement of management tools for tenders and partnerships for the third sector as "decisive."
"More than the investment, the fund gave us privileged access to networks and knowledge about the public sector, accelerating the social transformation we aim for," he declares.
Cases like these indicate the convergence of the venture capital market with two major important movements: ESG (environmental, social, and governance) and the Sustainable Development Goals (SDGs). This is because they are contributions granted conditioned on policies promoting socio-environmental and governance criteria, directly aligned with one or more SDGs, ranging from poverty eradication to global action against climate change.
For the managers of the Govtech Fund, these criteria should be considered as much as or more than the invested amounts and those with calculated returns. "Venture capital can indeed have a positive impact on people's lives, promoting not only financial growth but also a revolution in how public services serve citizens. Ultimately, this is one of the most lasting ways to measure the true value of venture capital in the country: not just in figures, but in concrete transformations for social well-being and sustainable development in Brazil," they emphasize.
