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Brazil-China Partnership

Foreign Investors are behind most Brazil acquisitions

Foreign investors were behind the majority of business acquisitions in Brazil in 2015, beating domestic investors for the first time since 2002, according to a report published Wednesday by the local media.

Foreign investors accounted for 51 percent of acquisitions and capital increases last year, up from 38 percent in 2014, according to the report, which was released by PwC’s Brazilian unit and published by the daily Folha de S. Paulo.

That percentage is expected to rise to 55 percent in 2016.

The depreciation of the real against the dollar and the difficulties some sectors are facing amid a severe economic crisis – with gross domestic product (GDP) contracting for three straight quarters and inflation well above the targeted level – have facilitated the arrival of foreign companies and investors.

“Foreigners are going to remain interested in Brazil while domestic companies will continue to have financing difficulties,” Rogerio Gollo, a senior partner at PwC Brazil, said.
The sectors most likely to attract foreign investment in 2016 are information technology, trade, agribusiness and renewable energies, Gollo said.

A total of 672 acquisitions of majority or minority stakes in Brazil-based companies took place last year, with foreign investors accounting for more than half of those transactions.
A “drastic reduction” in acquisitions by domestic investors has occurred since July amid a worsening political crisis that could even lead to President Dilma Rousseff’s impeachment, Gollo said.

Source Latino Fox News

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Sequoia’s First $14.3m Brazil Investment via Nubank

Brazil’s financial services start-up Company, Nubank is launching its first MasterCard Platinum credit card manageable through an Android or iOS app following the $14.3 million raised by the company led by Sequoia Capital – the first Brazil investment in a start-up.

Getting a credit card in Brazil can take weeks, lots of paperwork and many visits to a physical bank: Nubank intentions are to swipe all of that away.

David Vélez, founder and CEO of Nubank who used to work for Sequoia specifically to help scout out investment opportunities in South America told Tech Crunch “After spending more than two years looking at technology opportunities with Sequoia in Latin America, we got convinced that there were a ton of high quality opportunities for starting tech companies in this country, but not in the sectors that most tech companies/entrepreneurs were pursuing,”. He went on to say “I decided to strike on my own because I had always wanted to be an entrepreneur, and as a venture investor I saw more interesting opportunities on the entrepreneur’s side of the table, than in the investor’s side of the table.”

There are also some more Brazil Investment advances that Nubank is tapping into. The country has been seeing a boom in broadband penetration, headed largely through smartphone growth. Today, there are 90 million smartphones in use among Brazil’s population of 200 million and growth is not slowing down.

“Our story is not about under-penetration of banking. It is about offering credit products to already banked customers that are currently completely overpaying in terms of fees and expenses, and getting a very poor experience in return,” he says. “Since we don’t have to pay for expensive [physical bank] branches or other costly infrastructure, we can pass those savings to our customers in terms of no fees products, lower interest rates, and excellent customer service. Our customers also don’t want to pay for that expensive infrastructure by the way.”

Brazil’s mortgage market grew from just 1.5% of GDP in 2007 to about 6.2% of GDP in 2012 and is still growing showing the attractiveness of any Brazil Investment

 

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