“Ho ho ho…!!!!” Of course, we were going to start the December edition of the news with one of the biggest brands on the face of the Earth. Because after all, 🎶“so, it’s Christmas…”🎶 . And Santa Claus is in the area. Apparently, with a bag full of gifts, especially those that will materialize next year.

In the sleigh, besides the reindeer, Mr. Claus, and the trinkets, Christmas 2024 in the Venture Capital (VC) universe will still have to live with the evil deeds of Krampus. Yes, that’s right… For those who don’t know, Krampus is the B side of Santa Claus. Instead of smiles and hugs, he hands out punishments to those who misbehave.

That’s right. In the case of VC, despite having behaved properly, Krampus showed up on the scene. And the “evil thing” will be to live with a unpleasant basic interest rate in Brazil: 12.25%. And with projections that point to 15% in 2025.

Krampus’ Gifts.

The same old song well known by KPTL. After all, as a genuinely Brazilian investment firm for almost two decades, it is familiar with “Krampus’s gifts”. In addition to have to live with the mood of Mr. Claus, who has not been very present around Faria Lima Avenue, located in the financial heart of São Paulo (SP) and a symbol of VC in the country. But, that is set to change soon.

To Renato Ramalho, CEO of KPTL, the Brazilian venture capital market has been gaining strength. And one of the indicators of this is the sophistication of the type of investment made, with the search for supporting solutions that actually solve major Brazilian and global problems, such as climate change, food security, deforestation, automation, access to cutting-edge technology, population aging, besides providing economic activity in biome regions.

Good question… With this focus handed over to Santa Claus at the beginning of 2024, KPTL ignored the signs of fatigue in the VC universe – that typical tiredness at midnight after Christmas dinner – and started distributing gifts in October. In just over 40 days, it closed three operations, from three different funds, and attracted attention even in Lapland, the home of Santa Claus.

In other words, between October and November 2024, the manager negotiated equity in Akmey, Augen and VarejoOnline. In the first case, at the end of September, almost October, the controlling family of the Santa Catarina textile company bought back KPTL’s stake in the business.

“2024 was a very good year for us. It was a year to start reaping what we sowed,” says KPTL’s CEO. According to him, the divestments are largely explained by the maturity of the businesses sold. Especially because the type of innovation we are investing in – B2B, hard science, deep tech, bio-tech – requires more assertive capital until maturity, the ideal point for exit.

Another factor is that the management company operates in the early stage – it is at the beginning of this journey -, a segment less affected by the market slowdown. Wait, wait, wait… Early Stage? What? Calm down, calm down, calm down. Let us explain.

Is that clear? Crystal, right… So, let’s continue on this sleigh, because one of Santa’s gifts points to 2025. And, it will be opened drop by drop. Month after month.

This because KPTL is working with the expectation of intense movement, both in sales of invested companies and new entries. “We project between eight and 11 new contributions and 10 exits in 2025”, says Ramalho. Therefore, in 2025, the manager should maintain its portfolio similar to that of 2024, with around 70 startups invested.

Just for comparison, in 2023 the portfolio showed 55 startups invested, having registered two divestments (compared to four this year), eight investments (compared to 19 in 2024) and a total gross revenue from startups of BRL 832 million, a value that increased by BRL 919 million in 2024. As you can see, there was quite an evolution between 2023 and this year.

“We will start to sell more and more companies”, says the CEO of KPTL. “The talk of divestment is very strong among us, due to the maturation of the assets and funds, but we will also continue to invest”, he assures.

In other words, Santa Claus, be ready! In 2025, feed the reindeer more and give the sleigh a boost, because the bag will be bigger than this year’s.

This is because, according to Ramalho, the investments will be distributed across three fronts. The GovTech Fund, which currently has four startups invested in, should be used by KTPL to make between three and five contributions. The Floresta & Clima Fund, which currently only supports Ages Bioactive, could have two or three more companies. The plans also include up to three capital reinforcements in the Corporate Venture Capital Fund, created in 2024 in partnership with Banco BRB and whose initial value is BRL 50 million.

The value of the new contributions should be between BRL 2 million and BRL 7 million. In total, KPTL manages nine funds, which have already supported more than 136 early-stage startups in Brazil in almost twenty years.

Impact Startup

When it comes to investment, the Climate vertical quickly appears on the horizon, as we saw in the lines above. After all, all you have to do is ask Mr. Santa Claus how things are going in the sky on Christmas nights, and he will be categorical: It is cold where it should be warm. There is no snow where there should be knee-deep ice. It rains where it should snow. In short, the climate in the world is a complete mess.

KPTL, which has always invested in startups that can deal with situations arising from climate change, decided to go further. And in partnership with Fundo Vale and Impacta Finanças Sustentáveis, it decided to present the market with an unprecedented and robust study on the panorama of venture capital in the area of ​​climate change

Field with solar panels and wind turbines.

After analyzing more than 1,500 investments and businesses, the study identified significant advances in the most consolidated sectors, such as agriculture and energy, but also numerous structural challenges in businesses linked to forests and land use in Brazil.

According to the report “Venture Capital Contribution to Forests and Climate”, there are BRL 245 million idle in venture capital funds that are earmarked for sustainability in Brazil. And these resources could very well be invested in three verticals linked to climate and forests. They are: Agriculture and Food Systems (45%), Energy and Biofuels (17%) and Forests and Land Use (11%).

The leading role of agriculture and energy can be explained by several reasons, including the strategic importance of these sectors, a greater volume of public resources for research and a more favorable regulatory environment.

The other side of the coin is that, despite having great potential, the forest and land use market is struggling to develop more quickly. According to the study, the main challenges are the geographical distance of the businesses in relation to the large economic centers, the low value of investments in research and the still incipient regulatory situation.

Aerial view of an agroforestry farm.

And what can be done to reduce this discrepancy?

“I think that at first it is a question of it being a new market. So, I believe that there is a lack of awareness of the potential, especially in Brazil, which has a unique position in terms of reforestation capacity and carbon capture capacity. There is a need to educate the market on the subject and understand what the opportunities are to actually make this a real business”, says Júlia Coutinho, project leader at Impacta Finanças Sustentáveis and co-author of the study. (Read more about this in the 3 Questions section).

The good news is that a series of technologies already used in other sectors, such as agribusiness, are more than ready and can help quickly boost green businesses. “There are many opportunities to build a portfolio in forestry and climate. There are several mature technologies from other sectors that can be used in these areas as well”, says Felipe Vignoli, CEO of Impacta. Danilo Zelinski, from KTPL, reinforces: “Agriculture can also be part of the solution, with agroforestry, for example. What we are trying to do now, with technology, is to scale the agroforestry sector”.

Well, that’s it. See you in 2025. Oh, Buorit Juovllat to everyone, and in good Northern Sami, one of the dialects that are present in the Lapland region, Merry Christmas! Ho, ho, ho!!

“All our discontent with what we lack comes from our lack of gratitude for what we have”

Daniel Defoe, writer and journalist

3 Questions for…

Júlia Coutinho

A production engineer from PUC-RIO, she is a project leader at Impacta Finanças Sustentáveis, co-author of the study “Venture Capital’s Contribution to Forests and Climate” and has a degree in Impact Assessment from INSPER.

(Photo: Courtesy)

1) What are the main insights you highlight in the study on forests and climate?

There is a strong message, both globally and nationally, which is that the climate agenda has been receiving increasing attention. We see this both from climate flows and, mainly, via equity instruments. So, we have a positive assimilation from the market that this is a relevant agenda. But when we look mainly at Brazil, we have a major challenge, which is a discrepant reality between the main strategic sectors: agriculture, energy, forests and soil. We have very strong sectors, such as agriculture, energy and transportation. On the other hand, the forestry sector is still a very little explored universe. And we understand that venture capital has a fundamental role in this, mainly through enabling technologies. Within this market that is still not very mature, venture capital can invest and develop technologies that will structure the value chains necessary for these businesses.

2) What needs to be done to eliminate this discrepancy between sectors?

I think that at first it is a question of it being a new market. So, I believe that there is a lack of knowledge about the potential, mainly in Brazil, which has a unique position in terms of reforestation capacity and carbon capture capacity. There is a need to educate the market on the subject and understand what the opportunities are to actually become a real business. I also think that there is a shortage of resources. When we look mainly at research and innovation funding, the North still has few resources for research, both for institutes such as the National Institute for Amazonian Research (INPA) and for sectoral funds focused on the Amazon. We need, especially in a market that is developing, resources that are more risk-tolerant, more patient, public resources and not just have an expectation of return, so that we can create the basis for these businesses. In this way, we bring in venture capital, which can identify a business opportunity.

3) Would the role of public investment be to foster this ecosystem, first by creating conditions to attract private capital to invest in the forestry sector?

I certainly think that the public sector has a fundamental role, mainly in structuring this initial base, in diluting the risk represented by these businesses that are still in very early stages, but this does not have to be a one-size-fits-all approach. Public resources can come together with private resources, which is why we talk, for example, about mechanisms that combine capital, such as blended finance. We can bring in public resources, resources that are geared towards research and innovation, and at the same time bring in more risky resources, given that we can dilute this risk, right? So, we can combine these capitals at this first stage, and not just rely on public resources.