INTERVIEW: Fabio Iunis de Paula

Latin American IoT startup founders received a welcoming news on May of 2021: a group of investors launched the sector’s very first dedicated fund in the region.

Fabio Iunis de Paula, Co-founder and Managing Partner at Indicator Capital, gives details on the initiative and explains why companies in the region are competitive enough to acquire a portion of the IoT market, expected to reach $875 billion by 2025.

BayBrazil: Indicator Capital, along with BNDES and QUALCOMM Ventures launched the first early-stage venture capital fund, Indicator 2 IoT FIP, focused on Internet of Things (IoT) and Connectivity in Latin America. Why IoT for Latin America? Why now? Does the region have the infrastructure prepared for it?

Fabio: Indicator Capital’s decision for an investment fund focused on IoT and Connectivity was due to the combination of two macro trends:

1. the unique moment of the global digital transformation, in which the infrastructure in place has reached a tipping point allowing the acceleration of the Internet of Things; and
2. Brazil’s readiness to embrace this technological revolution and drive disruption in Latin America, supported by the maturity of the National IoT Plan.

The National IoT Plan is based on the study “Internet of Things: An action plan for Brazil”, in an initiative led by BNDES and the Ministry of Science, Technology, and Innovation (MCTI). Its objective is to accelerate the implementation of the Internet of Things as an essential tool for the sustainable development of Brazilian society, transforming people’s lives.

BayBrazil: Indicator 2 IoT FIP fund expects to invest in 30 companies in the initial stage (Series A). How would you define a champion startup profile to access the investment of approximately R$ 10 million for ten years? What are the main characteristics you look for in these companies to select them for your portfolio?

Fabio: We help catalyze digital transformation opportunities that can create new markets and become essential for the survival of corporations. We look for scalability and impact through the systematic adoption of technology to form efficient systems of intelligence.

We seek to invest in Brazilian IoT startups raising a Series A round, which we may or may not lead. We strongly believe in collaborative investment rounds where our expertise can help create value, particularly where our specialization in IoT has the most use. Typically, we seek startups that have crossed the US$30,000 MRR mark and are ready to scale revenues beyond 2x per year. Last but not least, we truly believe that this is a people business in which extraordinary founders and diverse teams make all the difference.