Plans for Brazil’s Newest Edtech Fund

Plans for Brazil’s Newest Edtech Fund

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Business is booming for Brazilian education entrepreneurs. In March, Bertelsmann, a multinational media company, announced a partnership with Bozano Investments, a Brazilian asset management group, to create the BR Education Ventures Fund, which will invest R$ 100 million (US$ 40 mi) in Brazil’s most innovative edtech companies.

Bertelsmann operates in many sectors in the media: It holds the publisher Penguin Random House, BMG records, the European television network RTL, and many others. Now, it has its eyes focused on the global education market.

Mackenbrock Thomas, director of Bertelsmann in Brazil, believes the company’s experience with traditional media will help them better understand the impact and changes that will come to the education sector. But first, "we need to have a good understanding of what is happening in this market, especially in adaptive learning and online learning platforms," says Mackenbrock.

Daniel Borghi, who leads Bozano’s education division, agrees with Mackenbrock, noting the importance of technology in education. "With the strong push to incorporate digital media into the education space, the model of teaching and learning will be more personalized, allowing students gain more independence. Customization tools are essential."

With this in mind, Bozano's team has already invested in its first two companies: QMágico and Evolve. The first is an adaptive platform that enables educational systems and institutions to use their own content to create online activities and assess the performance of their students. The second offers a corporate channel and a virtual space for the production, management and distribution of content.

Jonas Gomes, director of private equity in Bozano, states that, among other criteria, the fund will seek to balance the portfolio between fully established and new businesses. "We take into account a number of factors, such as the type of personalized learning that the team is building, the technology development and maturity of the company."

Expect to see another two or three companies score investments from this fund by the end of this year, and another five in 2015. "We're just starting and we have no hurry. Brazil still has much to learn in various industries, but I am surprised to see so many [Brazilian] education companies ready compete in the international market", says Mackenbrock.

Establishing a foothold in other education markets around the world is another objective of the fund. Bertelsmann is simultaneously investing in companies from other emerging countries like India and China. For Gomes, this is one of the key competitive advantages of BR Ventures. “Promoting the interaction between these markets and helping businesses expand internationally will be a strength of our fund.”

This article was originally published in Porvir. Thanks to Patricia Gomes for the translation.

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