Saturday, February 06, 2010

John H. Doyle II: Investing in Brazilian Digital Media

Against the backdrop of the recent global downturn, Brazil is emerging as an appealing market for investors. Though its economy, the largest in Latin America, was undoubtedly impacted by the downturn, Marciliano Freitas of Harpia Ventures observes that “Brazil’s GDP only decreased in 4Q08 and 1Q09, so the country experienced just two quarters of recession and year-over-year presented growth.” The Bovespa Index also climbed 82.7% in 2009—the highest of any stock market— amidst rising domestic consumption, political stability, and 5% annual economic growth, yet despite these gains, Brazilian stocks still trade at 12.9x forward earnings, compared with 19.1x in China and 18.4x in India.

This potential for growth, along with low labor costs—the average computer programmer makes $17,270 a year in Brazil versus $72,000 in the US—is attracting foreign entries into the Brazilian tech sector. Companies like Google, Yahoo, and Microsoft are already well-represented, while IBM formed the Sao Paulo IBM Innovation Center in August to stimulate development of Brazilian technology.

Digital media companies, however, are not the only players seizing opportunities in Brazil. ABVCAP estimates that venture and private capital inflows from foreign investors have totaled $22 billion over the past five years, and a survey conducted by Coller Capital in April 2009 shows Brazil ranking as the second most attractive investment destination in the world behind China. Carlyle Group revealed plans in September for a heavy push into Brazil, citing macroeconomic stability and increased openness to private equity, following the inceptions of a $50 million fund by Intel Capital in 2006 and a $170 million fund by a partnership between Draper Fisher Jurvetson and a local firm in 2007.

Claudia Fan Munce, managing director of IBM Venture Capital Group, remarked during IBM’s Innovation Center announcement, “We have been watching Brazil for a while. The time is right.”


Investing in Brazilian Digital Media

Peachtree Media Advisors is partnering with Harpia Ventures to introduce investors to the Brazilian digital media space and showcase a pipeline of early and growth stage companies. The following receptions are being held to provide venture capital and institutional investors with insight on the Brazilian digital media M&A marketplace:

March 16 in New York, NY at the Yale Club
March 18 in Boston, MA (location TBA)
March 22 in Redwood City, CA at the Sofitel San Francisco Bay

The receptions will discuss economic growth in Brazil; development of the digital media sector, including successful mobile and internet-based models; and ways to participate in the Brazilian digital media and technology pipeline.




Anonymous said...

peachtree advisors? never heard techstartups. is this an ad?

john said...
This comment has been removed by the author.
john said...

Nope, it's not an ad. Brazil, check it out. Throughout U.S. history, lots of money has been made in emerging markets replicating U.S. industrial business models. Why not the Internet and mobile? Best, John Doyle

Sorry, there was a typo in the last comment and I could not edit it. So, I had to remove it.

Anonymous said...

what the hell is this?
Most of our questions were answered with Navigation Aid. Also, each screen had a help icon. Peachtree also has a help menu on the top tool bar with links to user manuals, online support, and demonstrations.

Anonymous said...

seems pretty random? non?

george said...

last year brazil’s main stockmarket index rose 71 per cent in US dollar terms, or even faster than India’s, suggesting that international investors are awakening to the potential of the South American giant. much of that interest was focused on Brazil’s two biggest stocks – vale and petrobras.Vale is the world’s biggest exporter of iron ore; Petrobras has just made the world’s second-largest oil/gas discovery in 20 years, deep beneath Atlantic waters. but it’s renewable resources, rather than minerals, that are increasingly attracting investor interest.....anyway i digres.........

Anonymous said...

country is still fairly poor based on per capita income (177th) and most gdp is derived from commodity related goods. although population is 5th largest in the world, however i cant imagine there being that large of an opportunity for digital media since everyone is relatively poor..seems like mobile is the more viable way to play

- 2009 estimate 192,272,890[1] (5th)
- 2007 census 189,987,291
- Density 22/km2 (182nd)
57/sq mi
GDP (PPP) 2009 estimate
- Total $1.984.207 trillion[2] (9th)
- Per capita $10,455[2] (77th)
GDP (nominal) 2009 estimate
- Total $1.612.539 trillion (2008)[3] (8th[3])
- Per capita $7,737[2] (63rd)