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Investing in Brazilian Digital Media

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Investing in Brazilian Digital Media

Peachtree Media Advisors is partnering with Harpia Ventures to introduce investors to the Brazilian digital media space and showcase a pipeline of early and growth stage companies.  The following receptions are being held to provide venture capital and institutional investors with insight on the Brazilian digital media M&A marketplace:

March 16 in New York, NY at the Yale Club
March 18 in Boston, MA (location TBA)
March 22 in Redwood City, CA at the Sofitel San Francisco Bay

The receptions will discuss economic growth prospects in Brazil; development and potential of the digital media sector, including successful mobile and internet-based models; successful models being replicated in the market; and ways to participate in the Brazilian digital media and technology pipeline.

INTRODUCTION TO BRAZIL

Against the backdrop of the recent global downturn, Brazil is emerging as an appealing market for investors. Though its economy, the largest in Latin America, was undoubtedly impacted by the downturn, Marciliano Freitas of Harpia Ventures observes that “Brazil’s GDP only decreased in 4Q08 and 1Q09, so the country experienced just two quarters of recession and year-over-year presented growth.” The Bovespa Index also climbed 82.7% in 2009—the highest of any stock market— amidst rising domestic consumption, political stability, and 5% annual economic growth, yet despite these gains, Brazilian stocks still trade at 12.9x forward earnings, compared with 19.1x in China and 18.4x in India.

This potential for growth, along with low labor costs—the average computer programmer makes $17,270 a year in Brazil versus $72,000 in the US—is attracting foreign entries into the Brazilian tech sector. Companies like Google, Yahoo, Microsoft, Facebook, ESPN, and Discovery have already established a presence in the region, while Infosys, Fatwire, and Razorfish each opened offices in the past year and IBM formed the Sao Paulo IBM Innovation Center in August to stimulate development of Brazilian technology.

Digital media companies, however, are not the only players seizing opportunities in Brazil. ABVCAP estimates that venture and private capital inflows from foreign investors have totaled $22 billion over the past five years, and a survey conducted by Coller Capital in April 2009 shows Brazil ranking as the second most attractive investment destination in the world behind China. Carlyle Group revealed plans in September for a heavy push into Brazil, citing macroeconomic stability and increased openness to private equity, following the inceptions of a $50 million fund by Intel Capital in 2006 and a $170 million fund by a partnership between Draper Fisher Jurvetson and a local firm in 2007.

Claudia Fan Munce, managing director of IBM Venture Capital Group, remarked during IBM’s Innovation Center announcement, “We have been watching Brazil for a while. The time is right.”
 
RSVP

To learn more about digital media investment opportunities in Brazil, please RSVP by March 1, 2010 to brazil@peachtreemediaadvisors.com.  Information will be sent out to pre-qualified attendees.  C-level venture capital and institutional investors are invited to attend; members of the press may also inquire.

Contact:
John Doyle
Managing Director and Founder
Peachtree Media Advisors, Inc.
johnd@peachtreemediaadvisors.com
Tel: (212) 570-1009

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