1Mby1M Virtual Accelerator Investor Forum: With Rodrigo Baer of Redpoint Ventures (Part 2)

Sramana Mitra: Let’s talk a bit more in detail about the Redpoint e.ventures platform. All investments are happening in Brazil, correct?

Rodrigo Baer: We have a Latin American mandate. We’ve done one investment outside of Brazil in the first fund. We were very lucky. We did the seed investment in Rappi, which is now a $3.5 billion business.

We are going to be more proactive now on the second fund. I’m the one in charge of going out and scouting other Latin American markets. We’re still learning the ropes.

Sramana Mitra: Your fund is about $175 million. What is your stage preference?

Rodrigo Baer: We were designed to be a Series A fund. That’s our bread and butter. We take the liberty of doing seed and Series B rounds. We’ve done checks ranging from $35,000 to $8 million. Where we’re normally comfortable is companies with a product-market fit that need money to accelerate.

Sramana Mitra: Do you have enough of an ecosystem in Brazil at this point that can do the earlier stages? I presume you need a set of feeder funds from which to draw from. What is the status of your ecosystem?

Rodrigo Baer: We have a lot of angels. They are rich people writing checks. We have a few seed-stage funds that provide a decent pipeline. We don’t see scarcity. The company we invested in are now at a point where they can exit. This has freed up capital. These founders are now becoming angels on earlier startups. They’re also coming back for the second time.

Sramana Mitra: The other point that you have not made but I’m reading between the lines is you must be having a lot of bootstrapped ventures that are going straight into Series A and not doing a seed round.

Rodrigo Baer: They will typically come in with a seed round, but not from a typical seed fund. They get money from friends and family or angels. We have about 10,000 angels in Brazil that actively write checks. That has provided the capital to get Series A.

Sramana Mitra: What about sectors? Do you do both B2B and B2C? What are your segment preferences? What trends do you like to invest in?

Rodrigo Baer: We are agnostic. We feel that the Brazilian market is still fairly small. If we go sector-specific, we’ll be under-diversified. We like to keep our mandate as open as possible. We’ve done a lot of B2C. We’ve done a lot of B2B. We probably have the largest SaaS portfolio in the country.

I, particularly, like SaaS companies. That’s something I understand very well. There are problems that we’ve identified in the market that needs to get solved. We are proactive in scouting for solutions. It is founder-driven. There is a big wave of FinTech.

Now the leaders in the market have already been funded and are starting to pull ahead. We’re seeing a cooldown on FinTech. A lot of things are happening in FinTech infrastructure.

A lot of things are happening in real estate and property in Brazil. Those are sectors that have a lot of activity but not necessarily the only things that we look at. We are now doing deals in legal and retail. We are fairly agnostic about it.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Rodrigo Baer of Redpoint Ventures
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