The spread
of the Covid-19 pandemic substantially changed the scenario for the global and
Brazilian economies. The size and persistence of the shock will depend on how
fast countries succeed in the fight against the virus, the exit of the lockdown
period, and on how successful the economic policy responses to offset the
impact of the virus will be.
Reducing
impact is the critical point and seeking normality (considering risks and
safety) should be the final objective. For this goal, technology and creativity
must play important roles for the resumption of growth in economies.
The
Brazilian venture capital ecosystem flourished in the past years. Today, we
have funds, accelerators, angels, incubators, corporate and government
initiatives and associations in a universe of approximately 13 thousand
startups.
The current
crisis, despite its widespread negative consequences, offers an unique
opportunity to spark innovation within many sectors that have been directly
impacted by the pandemic - healthcare, work lifestyles, education and food
security, for example.
In Brazil,
several entrepreneurs are already rising to the challenge and helping address
the situation. Some examples follow below:
- Magnamed:
one of the few healthcare startups in the country that produces lung
ventilators signed a $61.2 million purchase agreement with the Brazilian
government for 6500 pulmonary respirators;
- Hi
Technologies: a Brazilian healthtech startup which specializes in laboratory
exam equipment, is producing a batch of diagnose tests for Covid-19, which drastically increased the demand for
prevention and detection kits. The tests provide results in 15-minutes and will
be sold at affordable prices;
- Cargo X:
A Brazilian logistics startup that has zeroed its marketing investments planned
for 2020 to create a BRL 30 million ($5.7 million) fund to help small carriers
and fleet owners in the country amid the coronavirus pandemic. With the money,
the startup will pay upfront 70% of the freight for essential products, such as
food and medicine items, at the time of loading, as a way to help these small
companies maintain their operations;
-
Netshow.me: A Brazilian startup focused on the distribution of digital content,
live streams, and on-demand videos for companies, is helping corporations
maintain operations remotely during the period of social isolation.
-
Descomplica: A Brazilian edtech startup originally focused on preparatory content
for college admission exams, this year expanded its offering to include
graduate programs and saw its demand increase substantially, despite the virus
outbreak and social distancing restrictions.
In a
nutshell, Brazilian startup founders have already had to deal with numerous
recessions, political volatility and other crises in the past few years but,
despite these adverse circumstances, have consistently proven their ability to
innovate and in the process also create value for society and investors. Real
startup entrepreneurs think long-term, and within the current challenging
scenario numerous opportunities are arising to accelerate the country´s digital
and technological transformation. Companies that embrace these opportunities
should get out of the crisis stronger, and we expect once again that the
Brazilian venture capital ecosystem will prove invaluable in spurring
innovation and helping society overcome this difficult moment, further
increasing its size and strengthening economic role moving forward.
Gabriela
Medina is Strategic Planning, Venture Capital and Impact Investment consultant
at ABVCAP