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IDB fund approves US$2.1 million for innovation investment fund for Brazilian small and medium-sized enterprises

The Inter-American Development Bank announced today the approval of a US$2.1 million financing to Capital Tech, created as an innovation investment fund to foster small and medium-sized technology enterprises in Brazil through venture capital.

The Multilateral Investment Fund financing will include a US$2 million reimbursable financing for the fund capitalization and a US$100,000 grant for technical cooperation. The fund will also receive contributions from private and institutional investors.

The Capital Tech investment fund will be established in Brazil as Fundo Mutuo de Investimento em Empresas Emergentes and will be managed by Invest Tech Gestao de Recursos (Investech).

Investments are likely to be located in Sao Paulo and Rio de Janeiro. Targeted industries include telecommunications, software, hardware, biotechnology, entertainment, manufacturing and services.

“The project will support a new venture capital management team and its first venture capital fund, which will provide equity and convertible debt financing and technical advisory and help in governance to 8 to 12 technology small and medium-sized enterprises with potential to provide its investors with exits via strategic sales, consolidation or the Bovespa Mais market,” said MIF team leader Rogerio Ramos.

“Capital Tech will invest in innovative information technology and service provider companies that offer new technology solutions or concepts to different industries with potential to expand to local and even international markets,” explained Ramos. “The fund will look for companies with technical, operational, commercial or financial synergies that will improve both the quality of the portfolio and exit strategies, the selling of shares in the different companies the fund invests in.”

Investech is a joint venture between Grupo Perrotti and Blackstone Servicos e Participacões. Grupo Perrotti was founded in 1977 and it was one of the pioneers in Brazil and Latin America to implement information technology infrastructure. Blackstone was created in 2003 as a business developer and advisory service provider looking into partnerships or mergers within the information technology industry. Its services include business plan development and implementation; financial, legal and operational advisory services; and search for potential buyers or partners.

MIF, an autonomous fund administered by the IDB, supports private sector development in Latin America and the Caribbean, focusing on microenterprise and small business.

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