CapTable, a crowdfunding platform registered with the Brazilian Securities and Exchange Commission (CVM), recently reported that equity crowdfunding in Brazil has jumped from BRL 8.4 million in contributions in 2016 to BRL 79 million ($18.6 million) in 2019.
According to Latin America Business Stories (LABS), the research took into account information from rounds completed on 13 of the most active platforms in Brazil. The organization also reported that in the first year of 2019, a total of BRL 36.4 million was raised, which was increased to BRL 43.3 million in the second half of the year. Paulo Deitos, Co-Founder of CapTable, further reviewed the findings by stating the following:
“If we compare the annual results for 2016 and 2019, we will see that we had an increase of 844% in four years. There was a discovery of the modality by the startups, and the trend is that the volumes to be raised will become larger.”
Guiherme Enck, Co-Founder of CapTable, also observed:
“We are going to have a huge flow from the debt market migrating to the equity market and so with private equity and venture capital funds they are benefiting from this scenario, crowdfunding will also benefit. Many people are considering crowdfunding as an option to diversify investments.”
Founded in July 2019, CapTable managed to raise BRL 4.25 million for five projects. Enck noted that CapTable does a strict screening of all projects that wish to raise funds on its platform in order to give more “credibility” to its investors. He noted that after CVM’s regulations the Brazilian market took a strong turn, with 2018 having an accelerated growth while 2019 was steady with not as much growth. He predicts that by 2020 the market will explode. Enck added:
“The profile of startups is that of entrepreneurs who already have a history. The companies have already passed the MVP (Minimum Viable Product) phase, are already going to the market with a finished product and now need capital to gain scale. They have a valuation starting at BRL 5 million.”