In a pioneering initiative in the Brazilian venture capital world, KPTL recently announced the launch of a startup equity investment fund aimed at generating positive impacts in the area of forests and climate. The plan is to invest R$200 million in various startups over the next five years.
Fundo Vale is a strategic partner in KPTL’s new fund, which also has some heavyweight investors, including Tridon Participações, the family office of the founders of Jacto, as well as business people Denis and Ilana Minev of the Bemol retail group and Marco Riguzzi, a businessman in the packaging sector and a shareholder in Farmaplast.
The fund is looking at startups that are working with technologies that have the potential to reduce costs and improve efficiency in carbon credit certification, as well as large-scale forest restoration and protection. “Brazil is in a position to be a global leader in sustainability-related innovations and promoting new technologies will be a fundamental part of our role in this regard,” says Renato Ramalho, the CEO of KPTL.
In the last 15 years, KPTL has made more than 100 investments in startups in a wide variety of sectors. In the environmental area, its investment portfolio includes companies such as Agrotools, a point of reference for data on Brazilian agribusiness and a sustainability partner of some of the world’s leading food companies. “We also manage BNDES’ Environment Investment Fund (FIMA), which has injected R$160 million into 11 companies since its launch in 2012,” Ramalho adds.
The involvement of a solid partner that is committed to this subject is also a competitive advantage of the Forest and Climate Fund. In 2021, Fundo Vale looked at various potential managers with the aim of choosing a partner to launch its investment fund, which would subsequently be open to other investors. KPTL was selected in this process, due to its experience of environmental innovation and its investments in agtech, biotechnology, the internet of things and online businesses.
Gustavo Luz, Fundo Vale and equity stakes manager at Vale, explains Fundo Vale’s strategy as co-structurer of the Forest and Climate Fund, supporting its impact measurement and assessment framework, its analysis of some of the target companies and its connections with impact ecosystem players.
“When investing in new impact businesses in line with Vale’s 2030 Forest Goal, we realized that in order to achieve large-scale results, we need to eliminate major bottlenecks affecting the chain as a whole. So, we decided to focus on structuring the Forest and Climate Fund in partnership with KPTL, with the belief that by investing in technological solutions that can reduce costs and increase efficiency in forestry operations while mitigating climate change, we will generate value for the entire ecosystem,” he explains.
Currently, Fundo Vale is responsible for the ideation and coordination of one of the largest habitat restoration initiatives under way in Brazil, based on the voluntary commitment of its sponsor, Vale, to restore and protect 500,000 hectares of forest in the country by 2030, known as Vale’s 2030 Forest Goal.
Entrepreneur Denis Minev brings to the table his experience at the Sustainable Amazonas Foundation, the Amazon Impact Accelerator (AMAZ) and Bemol, a retail chain in northern Brazil and a pioneer in adopting the ESG agenda in the region. “Forests are our best opportunity to strengthen Brazil as a major power in food production, carbon storage and innovation in the bioeconomy, helping reinvent the country’s economy for the 21st century. Brazil’s forests will allow it to redeem its reputation and achieve sustainable prosperity,” he says.
Profile of startups
The investment thesis of KPTL’s Forest and Climate Fund seeks startups in different phases of development, encompassing the pre-seed, seed and series A funding stages. Investment opportunities will be mapped by KPTL’s team, which currently features 27 professionals, in partnership with innovation hubs, universities and angel investors across Brazil. “This type of startup is often not found in large urban centers, so the search for good entrepreneurs will happen in a distributed way, always guided by the potential for positive impacts they can generate,” explains Ramalho.
There will be four main areas of activity: Forests, Carbon, the Bioeconomy and the Regenerative Economy. This means that the fund may invest in a variety of businesses, from fintechs that are developing solutions for carbon credits to agtechs that work with traceability, genetic improvement, biofertilizers and precision agriculture.
KPTL’s Forest and Climate Fund has an expected duration of 10 years, which may be extended for another two years. In addition to KPTL, accelerator Troposlab, consulting firm Imaflora, which has a long social and environmental track record, and Resulante, a specialized ESG consultancy, will work on structuring the fund.
KPTL is a venture capital manager that has so far invested in 65 companies. It believes in solid innovation and technology initiatives in a range of sectors, including agribusiness, health, forestry, climate, energy and the internet of things. The São Paulo-based firm has its own teams in Brazil’s main innovation centers and it continues to look for consistent startups with great growth potential.
About Fundo Vale
Fundo Vale is a business promotion and investment fund created to generate positive social and environmental impacts. Its purpose is to promote a fairer and more inclusive economy through social and environmental impact businesses. Since 2009, it has been helping to building a new economic reality by investing in business development, knowledge creation and financial mechanisms aimed at the conservation and recovery of biomes, especially the Amazon. Fundo Vale has so far supported 90 conservation and sustainable use projects and invested more than R$210 million, mostly non-refundable resources.