Host: Could you introduce yourself and your company?
Yann de Vries: Yes, good morning and thanks for the interview. I’m Yan de Vries, co-founder of Redpoint e. ventures in Brazil. We are a new venture fund started last year to focus on the Brazilian Internet startups. We’ve been backed by Redpoint Ventures and e.ventures together, they are the sponsors for the fund. We raised 130 million dollars last year. We will be investing in early stage consumer Internet, B to B, mobile, e-commerce, media, and SaaS companies. Our sweet spot is to focus on $ 3 to 5 million Series A investments. And that because we are a bit of a larger fund we also have a seed-seat program to invest in very early stage companies. We can also follow on into series B, series C, around for more mature companies.
Host: You are French, right?
Vries: Yes I’m French. I moved to Brazil two and a half years ago.
Host: Why did you move to Brazil?
Vries: I used to work with Cisco’s Corporate Development and I was traveling a lot to Latin America, and I saw an amazing opportunity in Brazil. It’s a huge market, there’s roughly a hundred million internet users over there. It was the very beginning. And it’s a very exciting place to be an investor right now. There’s everything to be built from very basic internet companies but also to leapfrog into really new exciting areas. That’s why I decided to move there. Especially with the backing of Redpoint and e.ventures, we had a very interesting value proposition locally, with a global platform. That’s why I decided to move to Brazil.
Host: What is your overall game plan? Are you thinking about bringing internet companies or business model from the US to start local Brazilian companies, or do you want to start a Brazilian company which might go to the international scene?
Vries: Good question. We are focusing really on identifying the best local entrepreneurs in Brazil, but because we have this global platform with Redpoint and e.ventures, with offices in Silicon Valley, New York, in China, Japan, Russia, and now in Brazil. We have a global insight into all the different business models and technologies that are very very moving quickly around the world. So we take advantage of those insights, to also identify local gaps in Brazilian market, and in some cases back a new team that wants to come to Brazil, do partnership with Asian companies that want to enter Brazil, with local teams in Brazil. So we have a duo approach where we can be very focus on Brazilian market but also take ideas from abroad that would be very powerful in Brazil, and also back some team to do that.
Host: You said that internet businesses in Brazil are just starting so there are a lot of opportunities. What kind of opportunities over there?
Vries: From the very basic e-commerce companies that 10 to 15 years ago were already started in the US, that’s still need to be done in Brazil. And there is also a lot of leapfrogging opportunities where all the companies are not very established. There’s not much competition. And there are opportunities for new players to come in with new mobile plays, internet SaaS place to really disrupt existing industries which are very inefficient. You look at financial services, education, health care, there are big segments that where internet as yet play a big role in providing new services, new pricing, and much more productivity to the companies and very innovative services to the consumers. That’s why Brazil is such an interesting place to invest from very basic internet services but also to much more mature, directly imported new ideas from the Western or Eastern world into Brazil.
Host: What are the areas you are interested right now?
Vries: So, lot of the segment we talked about, we are really trying to look at the areas where the existing industries are very inefficient, because they are very fragmented or there’s very low competition, and where the internet with new business models, very very highly scalable models, will be very efficient.
Vries: Education, health care, financial services, internet, mobile……Mobile is gonna play a big difference in Brazil. For example, there are 265 million mobile amusers in Brazil, still a lot of them are feature phones and prepaid, but smartphone penetration is increasing rapidly. There is maybe 40 to 50 million smart phones today, which will double in the next 2 to 3 years. So you start to have a really critical mass of mobile services. People will experience the internet for the first time on the mobile. That creates a very big opportunity. It’s a very young population in Brazil. They are early adopters of technology, they are incredibly social on the internet. Facebook, the second largest country is Brazil, Twitter, the second largest country is Brazil. So it’s an environment where people share a lot of information and are very active on the social network. This is very fertile ground to launch new services because you have a very good platform to very quickly scale if you had the right product, and with entering a new segment at a very low cost.
Host: What are the startup scenes? Are there any differences in the United States startup scenes and Brazil startup scenes?
Vries: It’s very different. Brazil is really starting. It’s a very nascent ecosystem, so we are only talking about hundreds of companies that are ventured back today, compared to thousands in the US. The total venture capital money in Brazil is maybe between $ 400 to 500 million today, compared to the $ billions in the US. You don’t have all the history of venture capital, all the serial entrepreneurs that you have in the Valley, the whole ecosystem between the universities, and incubators that is still very very nascent. But, because of the large market, the people who are starting today are very well-positioned to create big companies. That’s why you see a lot more foreigners coming to Brazil like myself. Europeans, Americans, Asians are coming to Brazil to take advantage of this market, and we are all working together in a very collaborative way because we all know that we need each other to make it succeed, to make it grow. That’s why it’s a very collaborative working environment, much less competitive that you would see in the US. Both entrepreneurs have less competition, and also the investors have much less competition. As funds, there is a handful of funds today in Brazil, so the valuation is much more reasonable, and you can be much more selective with the investment that you make.
Host: How come Brazilian environment is so open to the foreigners? Because other areas are closed to foreigners and they want to incubate their own people? And in Brazil, like you said, is more inviting to foreigners?
Vries: That’s a good question. First, I think Brazilians are very open as a culture. They are very social, they embrace all kinds of ethnicities. And they also see that they have a lot to learn from other business people who are coming to the country.
They realize that if they do it on their own in a closed environment, especially in the internet and technology space, it will be very difficult and slow for them to progress. That’s why they are embracing changes and Silicon Valley. They are very receptive to new funds and new executives who are coming in. I think, as the market matures, naturally they will become more closed. Brazilian economy per se is actually very closed economy. There’s huge import barriers and taxes. The government is trying to protect their own industries. But on the internet side, we take technology is overspreading in a very different paradigm. I think the locals really embrace that change from abroad.
Host: Is this your first time in Japan?
Vries: Yes, I’m delighted to be here. I’ve always wanted to come. I used to live in Hong Kong for 3 years and I never had a chance to come to Japan.
Host: What brought here to Infinity Ventures Summit?
Vries: Akio and I work very closely. We have this global platform. We meet every quarter in a different region. Akio had been to Brazil already twice. We try to foster this exchange of ideas between different regions and it’s very enriching for the partnership.
It was my opportunity to come to Japan to learn a lot about the Asian ecosystem, especially in Japan. There is a lot of innovation happening that I think will be very beneficial for us to see what Japan, or China, is doing ahead, or Brazil. And we are already starting to see a lot of exchange between Asian companies and Brazilian companies. A lot of Asian companies are seeing Brazil as very strategic suitable market for them, so we are stealing a lot of investments from companies like Baidu, Rakuten and others that are entering Brazil. I wouldn’t be surprised in the next 5 to 10 years there will be a lot of M&A activity coming between Asian and Brazilian companies in the future.
Host: What was your impression of Kyoto?
Vries: I’ve been charmed by the city, the heritage, and also the people. It had been very fun. We had a wonderful experience the other day when we sat at a restaurant. At the bar a couple started to exchange and invite me for sake. You know, people are very welcoming. And I’ve been stunned by the beauty of the city.
Host: Did you attend this morning at the meditation session?
Vries: I did.
Host: How was it?
Vries: Very interesting. I also got a line by the monk with a stick. It’s a very inspiring place and I think it’s very interesting for all of us to be able to reflect a little bit.
Host: Do you have any message to people who are thinking about attending Infinity Ventures Summit from foreign countries?
Vries: I would highly encourage to come. I think it’s a very informal atmosphere, which yields to building great relationships. I think there is some of the best and brightest people in the internet space that are attending this event. So it’s a wonderful opportunity to connect with them, and also to learn about other spaces and other geographies. I think from the few days I’ve spent here already I’ve met some invaluable contacts and I really opened my horizons a lot.
Host: Have you met any interesting people at IVS?
Vries: For sure. As I was saying I think there are some of the brightest people in the internet space here. All of them are on the leading edge and exploring new ideas, so this will be very helpful for me as I go back to Brazil.
Host: Is there anything that you have learnt from IVS so far?
Vries: For the event hasn’t started, but just seeing how Akio operates… And the lover with him I think the stars of the funding there… we are always looking for the next and brightest ideas. They are really on the leading edge I think. They are very deep contacts with very influential people both in Japan and China. And there are very closed to the entrepreneurs so I think that makes it a very powerful combination. Akio has made some great investments as a result and it’s inspiring for us to see how he does that with this team in Japan and China. We definitely would like to replicate this success over there if we can. Host: Are there any messages to Japanese people who are watching this Ustream?
Vries: I would like to extend my thanks to them for inviting me here. It’s been a wonderful experience so far, and I definitely want to come back.
Host: Thank you very much.