1Mby1M Virtual Accelerator Investor Forum: With Hernan Kazah of Kaszek Ventures (Part 3)

Sramana Mitra: Are there companies that have crossed $100 million in revenue?

Hernan Kazah: Certainly. We have a few in our portfolio. I was mentioning Netshoes. That’s over a billion dollars in revenue. There are a few companies that have gone over $100 million. Many have gone over $20 million.

Sramana Mitra: What do you see ahead? You described in a fair bit of detail in the last decade in terms of local-focused companies making it big in Latin America. Is that the trend that you see in the next five to ten years as well?

Hernan Kazah: There are two aspects. The big overriding theme is that one. Then you can go one level deeper and look into the different sectors. The first wave of growth came, mainly, out of the consumer companies with more focus on e-commerce. The second wave was more related to B2B. Companies were late to adopt technology but companies started to find great opportunities around serving banks and large financial institutions.

Then within consumer, you start to see more marketplaces emerging that connects supply and demand in an efficient manner. Then, there are a few areas where we’ve seen tremendous growth of opportunities within the last couple of years. One is FinTech. The penetration of financial services is not that high. Lots of small to medium sized companies do not have access to financing or lots of consumers do not have access to credit cards.

A lot of companies appeared in the FinTech area in the last few years. That will continue to be a trend. Another area is education. I haven’t seen that many happening but there are a few interesting companies. We’re currently investing in one. There are more opportunities there. Health is also another area.

Going back to my first point where we do feel that Latin America may have a great global edge is around agriculture. You look at farmers in Latin America and how they operate and integrate technology into farming, it’s quite surprising. We’re probably best in class compared to other developed markets. There, we feel there is an opportunity to create a company that can help those farmers take production to the next level.

There are lots of interesting small companies addressing some niches within those markets. They are doing well. We haven’t found one that has a significant regional or global aspiration. We’re looking at it. Next year, we’re going for our third fund. We’re hoping to find a company in that sector.

Sramana Mitra: I’m listening to you that there are all these other companies that are probably not scaling at venture pace. These are very important for the development of Latin America as an economy. These are extremely important to develop nicely and steadily.

Hernan Kazah: These are technology companies that are helping the real economy be more efficient. These are companies that help create an ecosystem related to technology. Certainly within any ecosystem, you need the big successes because they broadcast to everyone and then people aspire. Then you have lots of small companies that have real impact in the economy not only because of what they are producing but also because of the human capital that they create around it.

Sramana Mitra: Great! Thank you for your time.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Hernan Kazah of Kaszek Ventures
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