In my last post, I outlined how the world of B2B startups has evolved in Brazil over the past few years from a more theoretical perspective. In this post, I will provide a more tangible view of what “dark pool” markets in Brazil look like, and identify some of the top B2B startups that are disrupting them.
The companies listed below represent the “creme de la creme” of the Brazilian B2B startup world. I have met and engaged with the founders of each of these companies, and I would personally bet money on all of them. Why? Because the Founders have (1) Vision (they have charted a path to the creation of something massive); (2) Magnetism (they have the charisma, poise, and presence to attract top talent and intelligent capital); (3) and Drive (they possess an unrelenting, irrepressible determination to achieve success no matter what). The icing on the cake when it comes to each of these companies is that they’ve made the wise choice of focusing on dark pool markets that are large, ripe for tech-driven disruption, and unlikely to attract the attention of predators like Rocket Internet.
Without further ado, the four Brazilian B2B startups that I would personally invest in (in no particular order):
Printi: Florian Hagenbuch and Mate Pencz are inarguably two of the smartest guys in the Brazilian startup scene. They did a masterful job lining up a $1.2M seed round amidst an increasingly challenging capital raising environment. What I really love about this business, however, is the market it targets: the sleepy, old-school backwater that is the Brazilian printing industry. This is a textbook dark pool market, so unsexy and complex that few have ventured to disrupt it over the years. These market attributes – which might scare off your typical entrepreneur – are exactly what attracted Florian and Mate to the idea. They saw in the unsexiness of the market an opportunity to operate relatively competition-free, leveraging technology to slowly but surely take a bigger and bigger share of this massive market. I interviewed Florian and Mate for the Wharton Journal – check it out to learn more about their highly compelling business model.
Emprego Ligado: This is a 500 Startups-backed B2B startup focused on leveraging SMS technology to connect blue collar job seekers with prospective employers. I know cofounders Jake Rosenbloom and Derek Fears quite well, and they are rock stars (don’t know the third co-founder, Nathan Dee, but if Jake and Derek are any indication, he’s a machine as well). They have vision, they have execution, they have scrappiness and resolve. They were one of the first teams to understand that designing solutions for home-grown dark pool markets – as opposed to simply tropicalizing foreign business models – is a great way to achieve the kind of outcomes VCs look for. In the words of Jake, “the companies that will become truly sustainable in Brazil will be those that are designed specifically (not just localized) for the Brazilian marketplace.”
4Vets: I freaking love this business model. Classic case of targeting a dark pool market that’s gone unnoticed by everyone else. Bernardo Arrospide and Benjamin Lewis came to Brazil and discovered that the way in which pet stores, veterinary hospitals, and animal clinics procure products is antiquated and obsolete. It’s all done offline, which involves lots of phone calls, time-consuming trips to regional distributors, costly delays, time and money wasted. Why not offer a one-stop online shop for these businesses to obtain what they need to run their day-to-day operations from the comfort of their offices? This is what these razor-sharp Wharton entrepreneurs are doing. They’ve already signed exclusive distribution contracts with a few US companies to bring never-before-seen pet products to Brazil, and they just won first place out of more than 500 applicants in the LatAm startup challenge. This one is a no-brainer, I’d definitely invest if I had spare funds!
Itaro: These guys get it. They’ve gone after a super-unsexy, super-large market, built an impressive team with a deep bench of entrepreneurial talent, and lined-up a strong roster of investors anchored by Brazil’s vaunted angel investing duo, Kai Schoppen and Florian Otto. Itaro sells “tudo para seu carro” (everything for your car). At the moment, tires comprise the bulk of sales, but the longer term vision is to become the dominant provider of car products & parts to the massive number of mechanics and car repair shops across the country. I met with the founding team recently (led by Jan Riehle) and was blown away by their execution capability and the depth of their market knowledge. Another company I’d love to put money into.
That’s it for now. Haven’t decided what my next post will address, but I promise you it will be interesting and relevant… so stay tuned.