*Juliana Strohl is Legal and Compliance Leader at Kamino The year 2022 is off to a fast start for startups. According to research carried out by the Distrito platform, investments amounted to around R$ 3.6 billion between January and August. After a period of uncertainty caused by the crisis and due to the pandemic, this number […]
*Juliana Strohl is the Legal and Compliance leader at Chimney
The year 2022 has started fast for startups. According to a survey conducted by the platform Quarter, investments amounted, from January to August, to an approximate amount of R$ 3.6 billion. After a period of uncertainty caused by the crisis and the pandemic, this number showed signs of economic recovery and fostering innovation.
It turns out that, since the middle of the year, they’ve been on a decline. And, according to the index released by LexLatin, in the year, compared to the same period in 2021, investments were 45% lower. The slowdown, however, is not surprising given that 2021 was the best year for the innovation ecosystem in Brazil.
It was speculated that one of the biggest challenges this year would be to maintain the pace of 2021, both in terms of investments, new business start-ups, internal growth, hiring a team, among other. With a scenario of economic instability and rising interest rates in Brazil and abroad, businessmen have been less willing to take risks, being much more careful with their investments in Venture Capital, or risk capital, than in part explains this decline.
For 2023, the expectation is that the Venture Capital scenario will remain challenging. This is a way of investing in young companies with the expectation of rapid growth and high profitability, as well as being the more traditional funding model used by startups looking to scale their businesses. However, there are some legislative changes that can have a direct impact on the resumption of investment rounds, such as the Marco Cambial, which will come into effect on December 31st.
The interest of foreign funds in Brazilian entities has been going on for some time. The mark of exchange can, therefore, further favor foreign investment. The exchange rate reform will facilitate the entry of foreign investment into the country, the opening of dollar accounts, among other important aspects that help facilitate the next rounds.
Another point to look at is mergers and acquisitions, from the English Mergers and acquisitionsalso known as mergers and acquisitions, which will continue to grow in 2023. According to PwC Brasil, we had a record volume of transactions in the first six months of 2022. There were approximately 807 offers closed only in this period. The trend is for the movement to continue at the same pace until the end of the year and, if confirmed, according to a survey conducted by Bain & Company, mergers and acquisitions could move US $ 4.7 trillion (R $ 24.5 trillion ) until December of this year. This strategy has been important during the pandemic for many companies that have lost liquidity to circumvent the crisis and ensure their survival, being incorporated by more robust organizations.
Internal processes
Looking now at the internal processes, we can also say that automation will be widely used in 2023. Due to the high number of layoffs occurred during the year, mainly due to great technicians, investing in technology and internal automation can be a way to reduce costs and make teams more and more efficient. This is part of the measures taken by companies to continue operating in a scenario where there is a shortage of resources and the need to ‘downsize’ the team.
In the legal field, for example, we have noticed the use of software and artificial intelligence, even in the preparation and organization of simpler contracts. The trend continues for next year, where we will have more and more intelligence and data support to modernize even the most traditional sectors.
Despite the adversity, I believe startups have adapted to this time of change. In an effort to attract new investors and translate business metrics for them, there’s also joining the visual law, which is a way of making documents and procedural documents more attractive, making them more readable and understandable. Assets like this are part of the reinvention, seeking to meet new market challenges and be accountable to ever more demanding investors.
Differentiating your business from what already exists today and relying on solutions provided by specialists can be the way for new entrepreneurs, because yes, there is room for more. May 2023 comes with new business and investment rounds so that Brazilian startups can embark on their journey to success.
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Source: Terra
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
