32661 - Cventures Primus

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Summary of Investment Information

Project Number

32661

Company Name

CVENTURES PRIMUS FUNDO MUTUO DE INVESTIMENTO EM EMPRESAS EMERGENTES INOVADORAS

Date SPI Disclosed

Mar 25, 2013

Country

Brazil

Region

Latin America and the Caribbean

Projected Board Date

Apr 26, 2013

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Dec 14, 2022

Department

Equity Portfolio Management

Industry

Manufacturing

Previous Events

Approved : Jun 14, 2013
Signed : Jul 1, 2013
Invested : Sep 25, 2014

Sector

Private Equity/Venture Cap Fund - Country

Project Description

The project consists of BRL$15 million in equity investment, not to exceed 20% of the total commitments in Cventures Primus Fund (the “Fund”), a Brazilian early stage venture fund focused on cleantech, life sciences, IT and telecom, and digital media/education technology. The Fund’s expected size is BRL$80 million. The intent is to have a maximum of 12-16 companies, initially receiving BRL$3-4 million per company with follow-on investments as growth targets are met. Key focus regions are the three southern states (Parana, Santa Catarina and Rio Grande do Sul) of Brazil where many of the research institutes, incubators and universities exist as part of a venture/seed ecosystem. The Fund will be managed by CRP Companhia de Participações (“CRP”) with Cventures Innovative Enterprises and Holdings (“Cventures”) acting as a special advisor assisting pipeline development, deal execution, portfolio monitoring and exits.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	7.11

Development Impact

(i) Private sector development: The Fund will provide equity capital to help promote growth and improve revenue and profitability of the Fund's SME investees, and help support the venture capital industry in Brazil.
(ii) Economic sustainability: demonstrated through the Fund's ability to help its investees grow sustainably and generate employment growth faster than the national average. Cventures Ecosystem today has created thousands of jobs, a significant number of which are skilled jobs;
(iii) Financial success: evidenced by the Fund's investment return (net IRR).
(iv) Narrowing the gap of funding for early-stage companies: Despite the existence of innovative technologies, well established research centers/incubators and young companies in Brazil, there exists a gap in funding for early-stage companies in Brazil. There are limited venture investors for IT/telecom and internet in Brazil, and beyond that sector there is a dearth of venture capital funds. Demonstrating that investments in early-stage companies in cleantech, biotech, education tech/digital media sectors is profitable should lead to increased inflow of much needed private capital for these sectors in Brazil.
(v) Reduction of CO2 and other GHGs: The Fund is expected to invest a portion of its investments in clean technology companies, thus contributing to a reduction in carbon emissions.

IFC's participation in the Fund and its governance committees will create the following additionalities:
-- Catalytic role: as a multi-sector early stage venture fund, the Fund may have difficulties raising sufficient capital. IFC's investment will enable the Fund to achieve its target size. More generally, an IFC investment in a venture/early stage fund in Brazil will catalyze more international limited partners to investigate opportunities for venture/early stage investments in Brazil.
-- Provide unique IFC resources and experience: IFC's global experience and regional presence creates specific advantages: (i) governance leadership --Cventures seeks IFC's leadership with market standard practices for investment and advisory committees, which is key in Brazil where investment committees have LP presence; (ii) additional financing source --IFC's presence as a potential co-investment partner will be critical for new investees as well as when the investees grow and need access to additional growth funding; and (iii) regional and technical expertise --IFC's deep and broad experience in the Fund's sectors and target markets will help refine the Fund Manager's outlook, which is particularly important in a first time fund manager.
-- E&S best practice guidance: IFC will require and guide the Fund Manager in developing a robust E&S management system.
-- Stamp of approval for future fund raising: With IFC's investment, the Cventures team will have a stronger platform to raise international LP capital on this Fund or future funds.

E&S Category Rationale / Risks and Mitigation

The Fund will invest in early-stage and venture-stage companies that are developing and enabling innovation in the cleantech, life sciences, IT & telecom, and digital media/education sectors. Examples of identified pipeline projects include wasted oil-remediation technology, thermodynamic solar heaters technology, green building material manufacturing/distribution, K-12 education technology company and fraud prevention technology. The key focus regions for investments are the three southern states (Paraná, Santa Catarina and Rio Grande do Sul) of Brazil where many of the research institutes, incubators and universities exist as part of a venture/seed ecosystem and to a lesser degree the Southeast of Brazil where there is significant economic and entrepreneurial activity. Because the activities of potential investee companies may involve manufacturing processes and laboratory operations, the E&S risks are considered to be medium and mainly entail limited adverse E&S risk and impacts (management of waste/wastewater/air emissions and occupational health and safety of employees) that are few in number, generally site-specific, largely reversible and readily addressed though appropriate mitigation measures, this project has been classified as Category FI-2 according to IFC’s Environmental and Social Review Procedure.

In accordance with IFC's Access to Information Policy, IFC will periodically disclose the names, locations and sectors of sub-projects that have been supported by IFC investments through private equity funds, subject to regulatory constraints and market sensitivities. The sub-project(s) listed below reflect(s) the status of the portfolio as of January 1, 2022.

Investee	Country of Investment	Sector
aLavadeira	Brazil	Other Services (Including IT Enabled Services)
ASaaS	Brazil	Mobile channel service providers
Checkplant	Brazil	Computer Systems Design and Related Services (System Integration, Custom Computer Programming, IT Services etc.)
Exact Sales	Brazil	Computer Systems Design and Related Services (System Integration, Custom Computer Programming, IT Services etc.)
Hi Platform	Brazil	Marketing Consulting Services
Neoprospecta	Brazil	Other Medical
uMov	Brazil	Computer Systems Design and Related Services (System Integration, Custom Computer Programming, IT Services etc.)

As a Private Equity Fund, the main risks of this project are associated with the impacts of the Fund’s investments, in early-stage and venture-stage companies that are developing and enabling innovation in the cleantech, life sciences, IT & telecom, and digital media/education sectors. Potential risks associated with investments are principally related to the management of waste/wastewater/air emissions, where investee activities involve manufacturing processes and laboratory operations as well as occupational health and safety of employees, that would need to be addressed as part of the Fund's investment. There may be potential concerns surrounding investments in bioengineering, biotechnology, and pharmaceuticals if these entail research and use of biodiversity, and possibly involve impacts on indigenous peoples and cultural heritage.

Contacts

For Inquiries About the Project, Contact

Gabriela Salles
CRP Companhia de Participações
mailto:gabriela@crp.com.br
+55 51 92265988
Av. Soledade, 550/1001 – Petrópolis | Ed. Carlos Gomes Center
Porto Alegre – RS – Brasil – CEP 90470-340
+ 55 51 3211-0777 | http://www.crp.com.br

Felipe Marcondes de Mattos
Diretor de investimentos, Cventures
mailto:marcondes@cventures.com.br
cel. +55 48 9989 6090
com. +55 48 3239 2150
fax +55 48 3239 2009

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CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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Task Description	Anticipated Completion Date
Nominate E&S Officer	On or prior to Commitment
Establish an ESMS including guidelines for implementation	On or prior to Commitment
Implement Staff Training	Prior to Fund's First Investment
Submit first 3 ESDDs for review by IFC	Prior to Fund's Investment Decision

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