Low cost business boom, fintech for schools raises BRL 200 million and what matters in the market

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Low cost business boom

Faced with income eroded by inflation, Brazilians from different social strata have managed to maintain, at least in part, the standard of living they had in recent years.

In the middle class, the search is for cheaper products and services, the so-called low cost businesses.

What explains: With alternatives for those who have the leeway to manage expenses without abandoning habits, these businesses target the contingent of Brazilians who suffered budget restrictions after the pandemic.

• This portion reaches 64% population, according to a survey by Nielsen Media Research. The global average, with data from 99 other countries, is 46%.

some activities in which low cost businesses are booming at the end of the pandemic:

• Health insurance: with coverage ranging from R$169 to R$949, ​​startupcuidado.me has seen growing demand in recent months. Healthtech says that this price range makes its services about 50% or 70% cheaper than similar competitors.
• Private school: the Luminova school network was founded in 2019 to allow public school children to study in private schools without paying so much. With a monthly fee of around BRL 720today about half of the students come from private schools.
• Academy: Red Fitness, a low-cost network in São Paulo, has a monthly fee of around R$100 as one of the attractions for students who leave more expensive gyms. The movement on the network expanded from the pandemic, say the entrepreneurs.

Startup of the Week: Educbank

The “Startup of the Week” board brings on Mondays the x-ray of a startup that recently received funding.

The startup: was founded in 2020 by an owner of a network of schools, who saw in default a great difficulty in controlling cash flow. Educbank manages the receipt of monthly fees from basic education students.

In numbers: the startup announced last week that it had received a BRL 200 million in a Series A round (understand the stages of investing in startups here).

Investors: the contribution was led by Vasta Educação, Cogna’s basic education arm, and also had the participation of the manager Marrakech Capital.

What problem does it solve: the company promises to solve one of the great challenges of private education: default. She guarantees the payment of tuition to schools, anticipating the amount when the family is late, in exchange for a commission.

• EducBank founder Danilo Costa told Sheet last year that the startup evaluates and selects the schools it works with, prioritizing courses where the risk of default is lower

Why it’s featured: In addition to being the largest investment in startups announced last week in Latin America, the investment in EducBank comes at a time of falling incomes for Brazilians and record defaults in the country, which end up creating an even greater challenge for schools during the year school.

More about the startup: the expectation is to transact more than BRL 1 billion in school payments until 2023. Educabank also allows the payment of school fees with cryptocurrencies.

• Upon receiving from the customer, the company immediately converts the asset into reais, avoiding dealing with the already known sudden fluctuations in the currency.

The week at a glance

There were 16 funding rounds carried out in Latin America, with US$ 120 million (R$ 654 million) in investments. Brazil was the highlight, with US$ 72.5 million (R$ 395 million) raised in ten rounds.

Data is provided by the Sling Hub platform.

The gaming elite in the country

The digitalization caused by the pandemic and the growth of the country’s gamer culture boosted the creation of national video game studios. They more than doubled between 2018 and 2022.

In numbers: there are 1,009 formalized developers in the country. In 2018, they were 375and in 2014, 133. The numbers are from the 2022 Brazilian Games Industry Survey, released by Abragames, the industry association, at the BIG Festival.