At the age of 14, Celso Athayde’s task was to help his mother take other children from the Favela do Sapo, in Rio de Janeiro’s west zone, to the beach in exchange for payment. The informal business, called “Mãe Praieira”, gave parents the tranquility to go out to work without the fear of leaving their children home alone. “What my mother sold was credibility, reputation. Today, I would invest in her project,” says the CEO of Favela Holding, who is launching a venture capital fund of R$ 50 million for startups in the slums.
The initiative is a spin-off of a pioneering fund announced in December 2016 and launched in February of the following year. Of the 22 companies that currently make up Favela Holding, 10 are the result of these investments. The successful track record led to the decision to launch, five years later, the Favelas Fundos on the same day as its predecessor — February, 8. “Although it is not part of the official calendar, we consider the date as the National Day of Favela Entrepreneurship,” says Mr. Athayde.
Of the R$50 million planned, R$20 million will be available immediately: 13 holding companies will invest an average of R$1 million each. The rest will come from Favela Holding CEO’s own resources and from businessman and investor Evanildo Barros Júnior, who works in the marketing and technology sector and has experience in structuring companies. The remaining R$30 million have already been provisioned and will be invested later.
To apply for financing, the entrepreneurs will fill out a form available on the Internet. The CEOs of the companies of Favela Holding will select startups from various segments that are in one of three stages of maturity.
The idea is to concentrate investments in startup companies that are already operating, or companies that have reached a more mature stage and need to accelerate operations. The authors of projects in an initial stage, which have not yet left the paper, will be directed to an eight-month entrepreneurship course. The amount of the contributions will depend on the characteristics of the company and stage of the business.
Besides the amount, the difference between the previous fund, of R$ 3 million, and the one being launched now is that this time the initiative is more structured in terms of management and market approach, says Mr. Athayde. For the first time, most (75%) of the resources came from the entrepreneur himself, who reinvested the money obtained from the sale of his participation in Avante, a microcredit startup.
Professional management of the resources and speaking the language of the investors is fundamental to carry out the proposal of creating more businesses in the slums, he says. “In the communities, everyone finds a way to get by, everyone is creative, but there are opportunities that the residents themselves don’t realize.”
Founder of Central Única das Favelas (Cufa), Mr. Athayde left the organization in 2015 to create Favela Holding, which has different partners for each company. Among them are companies such as Comunidade Door, of billboards; Data Favela, of research; and Favela Log, of distribution and delivery of products.
Mr. Athayde knows well how favelas operate. Between the ages of six and twelve, after his parents separated, he lived under a bridge in Madureira, in Rio’s north zone, with his mother and brother, who was murdered. Later, he worked as a street vendor, joined the hip hop movement, and was one of the founders of Cufa.
Last month, Mr. Athayde became the winner of the Social Impact and Innovation Entrepreneur Award granted by the Schwab Foundation, linked to the World Economic Forum. The award is scheduled to next May during the Forum in Davos, Switzerland.
Before that, Mr. Athayde will announce his next project: Expo Favela, scheduled to take place between April 15 and 17 at the World Trade Center in São Paulo. The idea is to gather entrepreneurs and investors in the same space, promote lectures, meetings, and a business fair. The information provided by the candidates to Favelas Fundos will help to select the exhibitors, he informs. “We will have people from the favela and the asphalt, in the audience and on the stage”.
Source: Valor International