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Investment in Brazilian startups drops by half in 2022


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After the investment boom in Brazilian startups in 2021, which was considered a “bubble” by experts, in 2022 the hangover hit and priorities changed.

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The volume of investments in startups in the country fell by half from one year to the other, leaving the level of $10.5 billion (BRL 53.7 billion) for $5.2 billion (BRL 26.6 billion), according to a survey by the data intelligence platform SlingHub.

  • The drop in contributions was smaller when the scope for startups in Latin America is expanded: it fell 34% in the period of $18.4 billion (BRL 94 billion) for $12 billion (BRL 61.3 billion).

Which explains: much of the movement is related to the level of interest rates, mainly in the US.

  • Zeroed in 2021, it boosted investor risk appetite, which started to target assets with greater return potential, such as startups.
  • Persistent inflation, however, motivated the Federal Reserve (American central bank) to rapidly increase the pace of monetary tightening in 2022, reversing the flow of money from riskier assets to those considered safer, such as fixed income.
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The word of the hour in the world of startups has become another: cost cutting. In Brazil, it came mainly in the first half, when unicorns (startups valued at US$ 1 billion or more) promoted mass layoffs.

More numbers: there were 1,251 investments in Latin American startups last year, down 10% compared to 2021.

  • The retreat was smaller than that registered in the total amount of contributions because investors started looking for new startups, with less costly rounds.
  • In Brazil, the number of new unicorns plummeted 80%. After the record of ten startups that reached this level in 2021, there were only two in 2022 – Neon and Dock.

American case in court

The R$20 billion accounting shortfall revealed to the market last week by Americanas reached the courts.

Which explains: the company told the court that the breach discovered could generate an “early and immediate maturity of debts in the approximate amount of BRL 40 billion”.

  • The company also claims that it already received, on Friday, the first charge from a creditor.
  • The limit foreseen in some financing agreements is 3.5 times.

In numbers: in XP’s accounts, Americanas will need to raise, through a share offering, amounts between BRL 12 billion and BRL 21 billions to meet your creditors.

Remember: the “inconsistencies” of BRL 20 billion occurred in an operation called “risk drawn”, in which the retailer borrows money from the bank to pay suppliers – understand how it works here.

  • The problem reported by Sergio Rial, now the company’s former CEO, is that this loan did not appear on the balance sheet as a financial expense, but in the suppliers account, a different class of the balance sheet that does not change the company’s indebtedness.
  • A question not yet clarified, according to accountants interviewed by Reuters, is whether the interest on these risk operations withdrawn are on the retailer’s balance sheet or if what was recorded was just the value of the merchandise.

More about the Americana case:

  • In addition to the current and former administration of Americanas, the questioning will once again knock on the door of audits, responsible for evaluating the accounts of publicly-held companies, writes columnist Marcos de Vasconcellos.

Tim Cook takes pay cut

Apple CEO Tim Cook has asked and will see his compensation drop by about 40% in 2023 compared to the last two years.

In numbers: Cook’s compensation package, which includes wages, stock and other benefits, is expected to be $49 million (R$ 229 million) this year.

  • It is a decrease compared to the US$ 99.4 million (R$ 508 million) and US$ 98.7 million (R$ 504 million) of 2022 and 2021, respectively. In 2021, his remuneration skyrocketed 569% compared to the previous year.

According to the company, the decision was taken at the request of the CEO himself and also after 64% of shareholders approved Cook’s salary package at last year’s meeting, below 94.9% of the previous year.

Applewhich was one of the tech companies least hit by inflation and high interest rates, has been rocked by months of production turmoil in Zhengzhou, China, home to the world’s biggest iPhone factory.

Even with the pay cut, Tim Cook will remain one of the highest paid CEOs in the world. A study last year showed that the millionaire salaries of company presidents can exacerbate inequality.

Speaking of multibillionaire…See here the story of Bernard Arnault, French emperor of luxury and owner of the greatest fortune on the planet.

race by revenue

Since taking over Twitter after having to buy it for $44 billion, billionaire Elon Musk has been trying to get social network accounts out of the red.

Your newest plan is to sell usernames, in online auctions, with the idea of ​​selling the attractive “attributes”. It is not clear if the idea will go ahead and if the users sold will only be those considered unused by the platform, according to the New York Times.

Other way of raising revenue goes through advertisements on the network, in the “pay 1, take 2” mode. Anyone who buys an advertisement worth up to $250k will receive airtime worth twice the price paid, reported the Wall Street Journal.

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