Tech Roundup: A fund to foster the Amazon bioeconomy

Welcome to our Tech Roundup, where we bring you the biggest stories in technology and innovation in Brazil and Latin America. This week: A bioeconomy fund to foster tech-based businesses in the Amazon rainforest.

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USD 30 million boost for the Amazon’s bioeconomy

The Brazilian asset manager KPTL (pronounced “capital”) has just launched its first international venture capital fund, targeting the bioeconomy across seven Latin American countries that make up the Amazon rainforest: Brazil, Bolivia, Colombia, Ecuador, Peru, Guyana, and Suriname. 

The fund, called Amazonia Regenerate Accelerator and Investment Fund, is a partnership with Kaeté, a private equity firm committed to sustainable investments targeting low-income communities.

Context. The fund emerged from a conversation two years ago between KPTL CEO Renato Ramalho and Kaeté founder Otávio Ottoni. “We realized we could take this off the ground by bringing Kaeté’s regional knowledge and KPTL’s VC expertise,” Mr. Ramalho tells The Brazilian Report.  

Backdrop. Impact investing has long been part of KPTL’s DNA. With more than USD 1 billion under management, KPTL has managed the Environmental Innovation Fund (FIMA), created by Brazil’s National Development Bank (BDNES), since 2013.

• In 2022, KPTL also partnered with mining company Vale to launch the Forest and Climate Fund. 

• Earlier this year, in partnership with Cedro Capital, it created Latin America’s first fund dedicated to govtech startups.

State of play. The fund launches with USD 11 million, anchored by the IDB Lab, the innovation arm of the Inter-American Development Bank, and resources from the Green Climate Fund and the Natural Capital Lab. 

• Individual investors such as Denis Minev, founder of northern Brazilian retail and e-commerce giant Bemol, are also contributing.

• Mr. Ramalho expects the fund to reach USD 15 million by October and USD 30 billion in the next 18 months, drawing in development banks, international funds, and companies experienced in investing in Latin America. 

How it will work. KPTL seeks early-stage companies that are already operational, with checks ranging from USD 150,000 to USD 1 million. Jorge Farfa, a former manager of Colombian Bamboo Capital Partners, will lead fund management.

Why it matters. While much is said about deforestation and preservation, little has been done to change the destructive economy of the Amazon.

•  “We need to present alternatives for this to happen, and we need to do this from a business perspective,” says Mr. Ramalho. 

Yes, but… The region’s ecosystem and investor maturity levels remain low. To address this, the fund adopts a broad definition of bioeconomy, encompassing any business that extracts value from nature. 

• “We need technology to study, discover, and extract bioactives, but also to transport, distribute, and sell them,” says Mr. Ramalho.

Challenges. At events abroad — such as Brazil Climate Summit Europe, of which The Brazilian Report was a media partner — Mr. Ramalho says that the message about the country’s nature-based business potential has been understood, but that international investors still have to adapt their strategies for the Amazon.

• Talking to a European development bank, Mr. Ramalho was told that their minimum check was USD 100 million and that they would only invest in companies in which they could have a 10 percent stake.

• “So would I need USD 1 billion to attract them and others like them? See, they are all interested; I never get no for an answer when I offer to explain the impact investments we manage, but there is clearly a learning curve here too,” he says. “Being a pioneer has that cost, of needing to train entrepreneurs and investors.” 

Take note

Cosmetics and wellness giant Natura has launched its first corporate venture capital (CVC) fund, committing BRL 50 million (USD 9.2 million) to startups over the next three years. VOX Capital will manage the fund.

The House approved legislation creating new incentives for Brazil’s semiconductor manufacturing chain. The Brasil Semicon program extends incentives to 2029 and authorizes new financing lines. The bill moves on to the Senate.

A report by eMarketer reveals that eight of the 15 fastest-growing companies in the retail media ad sector last year were Latin American retailers, such as GPA, Mercado Libre, and Magazine Luiza. Starting in 2025, retail media ad spending is expected to grow by USD 1 billion annually through 2028.

Telecommunications regulatory agency Anatel has developed a generative AI tool to help its employees summarize processes and generate documents. The tool will be available to any public body linked to the government’s electronic system (SEI).

A digital bank focused on travelers and international accounts, Nomad acquired Melhor Câmbio, an online marketplace for foreign exchange operations, for around BRL 3 million. The platform has 1 million unique monthly users and could be an important customer acquisition tool for Nomad.