French Angel Investor gets to Brazil
Valor Econômico
Frenchman Stéphane Darracq, who works as an entrepreneur and investor, sees in Brazil great potential for creating something similar to the Silicon Valley, in the region of California where many information technology (IT) companies are concentrated and produce most of the innovation in the United States. As founder and President of LeadMedia, a company specialized in Internet marketing systems and services, he was responsible for the acquisition, in January, of Media Factory - which formerly belonged to the IdeiasNet group - and the Busca Descontos site, in June 2010. Now, in the role of Angel-investor, Darracq gets himself together to make new acquisitions in the country.
At the end of last year, the entrepreneur founded the investment firm Équinoxe, exclusively focused on investments in Brazilian IT companies. The company was founded with an initial capital of US$ 10 million, invested by eight European angel investors, including Darracq. The company aims at investing in small and micro enterprises in the areas of internet, services for mobile devices, e-commerce, games and social networks, with annual income between R$ 5 million (US$ 3.13 million) and R$ 10 million (US$ 6.3 million) and high growth potential.
In each company, Équinoxe foresees investing between US$ 500 billion and US$ 1 million. The goal is to join up to 20 Brazilian beginner companies. "At the time, I negotiate with four companies. The intention is to enter into partnerships with two or three companies until July", says Darracq. He keeps the names of the companies in secrecy, but he says the list includes a company of online games, one of e-commerce and another concentrated on the sale of ads on social networks. According to the President of Equinoxe, the capital may be in majority or minority interest. The company has no specified duration.
The entrepreneur says that, on average, of every ten IT companies in which he invests, two to three fail; four to six get to the break-even point and two or three achieve success. "The success of those two or three companies is normally so good that it makes up for all other non-profitable investments", he says. The advantage of investing in the IT area, says Darracq, is that the initial investment is typically lower than in the traditional businesses, as retail and manufacturing companies.
On the assessment of the entrepreneur, Brazil is currently at the ideal time to invest, with a growing economy, political stability, a considerably large technology market and strong potential for growth in the coming years. "Now is the time to invest in Brazil because the companies still have a low price. In five years, the market will be mature, but the prices of the companies will be high and it will be late to think about investing", he says. To start the operations in Brazil, Darracq contracted Ficus Investimentos to support the negotiations. He also hired three executives to attract new partners. Besides eight European investors, the company aims at attracting two Brazilian investing partners.