Venture South of the Border

I have had a number of discussions with people this year about when venture will take off in Latin America. Venture capital is clearly going global. We have added affiliates from our own network not only in India and China as many are doing, but also in Russia and Eastern Europe. We are in discussions with several firms in Latin America about expansion down there. With the boom in commodities, there will be increasing economic activity and resources flowing south of the border. There are pockets of activity in energy and telecom specifically in Latin America. The following article describes Intel's recent expansion. Much like the railroads opened up economic activity across all regions of the United States, the internet is doing so across the globe whether it be chip design in China or game development in Estonia. Our business has definitely scaled well beyond it cottage industry roots and will become more international in nature. This will increasingly reward the firms with the largest global networks and put pressure on smaller regional players. It is the next phase in the institutionalization of the business.

venture market summary

By VentureWire Staff Reporters
Continuing its trip around the world in search of venture deals to seed nascent technology markets, Intel Capital, the venture arm of the world's largest chip company, has launched a new $50 million fund for investments in Brazil.
The burgeoning economy was one of the determining factors in the decision to launch the latest fund, according to Dave Thomas, managing director for Intel Capital Latin America. There were "significant improvements in the investment arena in the last 18 to 24 months," he said.
Foremost among them "is the strength of the public capital markets," he said. Investments in Brazil can look to the Nuevo Mercado as a viable place for a public offering, and changes in the ways that venture investments are taxed also make the investment climate much more favorable, Thomas said.
For National Venture Capital Association President Mark Heesen, it's surprising that more investors don't make the trip south. "The venture market in Latin America is still not a particularly great market," he said. "I continue to kind of be surprised by that when you look at the growing middle class in Central and South America and you look at the stability of the governments."
Intel's launch of its Brazilian venture capital fund comes a little over three months after it announced a $250 million venture fund for India and four months after the announcement of a $50 million fund for investments in the Middle East. Though Intel has invested in Brazil since 1999, the new fund represents its strongest commitment there to date. Intel Capital has invested more than $35 million in 13 companies in the country since it began committing capital there.