Digital Transformation acceleration process in large corporations is the central thesis of fund 1, which has entered the divestment stage. The presence of the VC firm in the US contributes to the excellent performance that has already accumulated exits of Social Miner, IOUU, Threedy.ai and TEVEC
February 2022 – The recent acceleration of Digital Transformation in companies represents a universe of opportunities for investments in venture capital and startups. According to the global survey CEO Outlook done by KPMG, 67% of CEOs said they had made progress in digitization operations far ahead of expectations. The year 2021 recorded a historic rate of investments in startups in Brazil: there were more than BRL 46B in contributions, a result of this natural behavior of organizations to embrace transformative technologies in their businesses.
Indicator Capital, a Brazilian early-stage venture capital firm with over BRL 300M under management and the largest in Latin America specializing in IoT (Internet of Things), has been successfully getting results of this unprecedented market movement. In just over a year, since September 2020, Indicator Capital’s first fund has registered four exits to corporations: Social Miner was sold to Locaweb (LWSA3), IOUU to Banco Letsbank, Threedy.ai to Nextech AR (NECF) and TEVEC to infra.commerce (IFCM3).
According to the VC firm thesis, for large corporations to transform themselves digitally, they will need to hire and even acquire technology-based startups. Indicator invests in startups that drive corporate Digital Transformation.
Expertise in Digital Transformation to generate consistent returns
Social Miner, specialized in technology and solutions for e-commerce companies and retailers, was acquired by Locaweb (B3: LWSA3) in September 2020. This was Indicator Capital's first exit and considered a representative milestone because it took place in less than three years. “In recent years, there have been numerous IPOs of corporations seeking to strengthen their Digital Transformation strategy. As a result, the search for partnerships, mergers and acquisitions with startups has increased significantly. Our funds are increasingly becoming a shopping center for Digital Transformation,” comments Thomas Bittar, founding partner of Indicator Capital, responsible for the investment deal in Social Miner.
Subsequently, in April 2021, IOUU, a P2P lending platform for companies, was acquired by LetsBank. The fund participated in the entire development cycle of the startup. The second exit, also in record time, confirmed the heating up of the sector. “The fintech ecosystem has never been so heated and competitive. Large incumbent banks face a huge challenge coming from smaller and more agile financial institutions that are rapidly differentiating themselves through acquisitions of recent technologies,” comments Derek Bittar, founding partner of Indicator Capital, responsible for the investment deal in IOUU.
In June 2021, it was the turn of Threedy.ai, a California-based deep-tech solution, to be acquired by Nextech AR Solutions (CNSX: NEXCF). The startup uses state-of-the-art computational geometry and Artificial Intelligence to help large companies generate and scale 3D objects, enabling Augmented Reality more cost-effectively. “With our position in California, we are aware of what is most innovative in the world, and we are able to anticipate trends and better assess the right opportunities for Brazil. Although our first three exits took place on very tight deadlines, it is something we had already planned. Our expertise in Digital Transformation makes large corporations keep an eye on our investments,” comments Fabio Iunis de Paula, founding partner of Indicator Capital, responsible for the investment in Threedy.ai.
And finally, in early 2022, TEVEC, a Machine Learning platform focused on Artificial Intelligence algorithms for Digital Transformation, was acquired by Infracommerce (B3: IFCM3). The company's solution enables the automation of analysis for decision making on supply, purchases, campaigns, and prices. Fabio Iunis de Paula, founding partner of Indicator Capital, was also responsible for this investment.
Launch of Fund 2 IoT drives Digital Transformation in strategic sectors
In the first half of 2021, the VC firm launched its second fund, Indicator 2 IoT, with an initial value of BRL 240M and the first specialized on the Internet of Things (IoT) in Latin America. Aimed at startups that develop services and products related to IoT and Connectivity, the fund promotes the National IoT Plan, accelerating technologies from strategic sectors for the country, such as Agriculture, Health, Industry 4.0, Smart Cities and Mobility. In a 10-year period, the fund will invest in up to 30 companies with focus on the initial stage (Series A). So far, four contributions have already been made, with a total value of more than BRL 30M, in Monuv, CTA Smart, InfoPrice and Beegol.
About Indicator Capital
Founded in 2014, Indicator Capital is a Brazilian venture capital firm operating in Sao Paulo and the Silicon Valley. The partnership formed by Derek Lundgren Bittar, Fabio Iunis de Paula, and Thomas Lundgren Bittar, promotes the convergence between the dream of the entrepreneur and the financial return for the investor, tropicalizing American best practices to national startups. With more than BRL 300M under management, Indicator Capital is the largest early-stage venture capital firm in Latin America specialized in the Internet of Things (IoT). In their investments, the partners apply value-adding, proprietary methodology Building Value Together®, besides acting as Investors for Good, a concept reinforced by the firm`s certification as a B System™ company.
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