In the current scenario, when the tech ecosystem is rapidly evolving, emerging companies like DOMO.VC are contributing to this transformational journey in Latin America.
The company was established to support the growth of tech startups, particularly in Latin America. Motivated by their mutual dedication and proficiency in the Latin American digital sector, the company’s Co-founders, seasoned industry professionals themselves, seek to empower and finance the upcoming generation of creative leaders in the area. Join us to explore more about the tech space in this region and the vision of DOMO.VC in redefining this sector.
Origin Of DOMO.VC: The Story Behind
With a vision to support the rising tech entrepreneurs of the next generation, the Founders merged their expertise and passion to build DOMO.VC.
DOMO.VC was founded on the vision of nurturing the next generation of tech entrepreneurs in Latin America. The three co-founders, each a successful tech founder, investor, advisor, and executive in their own right, were driven by the ambition to finance and foster the upcoming wave of innovative leaders in the region. This initiative was rooted in their collective experience and a shared commitment to propel the Latin American tech ecosystem forward.
The Founder mentioned, “The name – DOMO, inspired by the architectural form of a dome, symbolizes strength, unity, and stability, embodying the essence of protection. We aim to be perceived by investors as a robust and dependable entity and by founders as a bastion of support where they can find sanctuary and receive expert guidance. This name aligns with our commitment to providing a secure foundation and reliable advice, positioning us as a pivotal resource in the tech landscape.” Marcello Gonçalves, Founding Partner
Intending to be a trustworthy entity for investors and a supportive resource in the tech landscape, DOMO.VC. is emerging as a trustworthy name in this space.
Exploring The Approach of DOMO.VC
As investors in the startup landscape, the Founders of DOMO.VC adopts an opportunistic yet fundamentalist approach.
DOMO.VC’s tech investments are influenced by market trends, ranging from fintech to consumer solutions. Their strategy prioritizes growth and expansive markets while emphasizing financial prudence. The organization only invests when the entry valuation justifies the capital, acquiring fair value for each investment to ensure strategic soundness and financial sustainability.
Prioritizing fair value and strategic soundness, DOMO.VC ensures sustainable investments amidst market behavior.
Successful Investments Of DOMO.VC
The firm’s expertise has been reflected in the investments they made in startups, like Hotmart or Gympass.
Hotmart was a standout investment for the Founders, representing a contrarian approach to traditional investing. Hotmart specializes in the distribution of digital products, primarily educational courses. This platform first caught DOMO.VC’s attention in 2013.
The Founder shared, “At that time, we invested in Hotmart through Buscapé, Brazil’s pioneering internet venture, founded in 1998 by my partner Rodrigo Borges. After Rodrigo exited Buscapé following its sale to Naspers in 2014, he, along with Marcello Gonçalves (our co-founder) and Kees Koolen (founder of Booking.com), acquired Buscapé’s stake in Hotmart at a valuation of $10 million.” Rodrigo Borges, Founding Partner
Despite consistently strong growth, Hotmart initially struggled to secure venture capital funding in 2016, but achieved financial stability and continued to grow independently. In 2019, Hotmart received substantial funding from General Atlantic and GIC, and by 2020, after acquiring Teachable, its valuation reached $4.5 billion. This journey reflects DOMO.VC’s strategic, opportunistic investment style, their focus on disciplined entry valuations, and their unwavering commitment to their convictions, even in the face of widespread skepticism. This approach not only fueled Hotmart’s ascent but also fortified its portfolio’s performance.
Challenges And Triumphs
Every industry is inevitably filled with challenging phases and DOMO.VC is not an exception. Deploying capital in 2020-2021 was challenging for the founders of DOMO.VC due to the highly volatile venture capital market, especially in Latin America.
Excess liquidity led to inflated valuations beyond their comfort level, causing them to step back from many deals and temporarily pause investments. Limited Partners (LPs) felt the pressure as their capital was called upon by other funds but not by the company. Despite the challenges, DOMO.VC remained committed to its conservative investment philosophy, which paid off in the long run. Unlike competitors facing markdowns and write-offs, their deliberate and cautious approach protected their returns.
The Founder even mentioned, “Fortunately, we did not encounter these issues. Our fund never experienced a valuation below par, as we never participated in down rounds or invested in companies that were solely dependent on continuous capital influx. We recognized that a high rate of cash burn at this stage could swiftly jeopardize a business, and we managed to avoid such pitfalls.” Marcio Zarzur, Managing Partner
Their disciplined approach not only preserved but also enhanced the company’s fund health and reputation, affirming the wisdom of their cautious investment strategy during a particularly challenging economic climate.
The Future Of DOMO.VC
Our exploration of the company has revealed the upcoming expansion plans the Founders have got.
The Founders enthusiastically shared, “Our long-term objective is resolutely set: we aim to become the partner of choice for the top entrepreneurs across Latin America. Our recent strategic moves into markets beyond Brazil reflect our ambition to establish ourselves as the premier early-stage investment firm in the region. A pivotal aspect of this expansion will be raising capital from European and Middle Eastern investors for the first time, marking a significant milestone in our growth journey.”
They believe that the current exposure to Latin American tech is relatively underweight in these areas, presenting significant opportunities for growth. By cultivating enduring and productive partnerships with sophisticated investors in these regions, they are poised to elevate the firm’s capabilities substantially.
This includes enhancing their Limited Partners (LP) reporting, refining governance structures, and amplifying the visibility of the firm and the Latin American region on the global stage. These initiatives are critical in their quest to not only grow our footprint but also bring valuable insights and resources back to the entrepreneurs they support.
Support Beyond Investments
The firm’s investment strategy emphasizes a hands-on approach, particularly through close collaboration with the founders of our portfolio companies.
“We recognize that even the most exceptional founders may lack certain skills in company management and strategic development, often due to their limited experience in leadership roles. Recognizing that many challenges at the seed stage are universal, we have developed a proven process to guide our companies effectively.” The Founders mentioned.
After investment, they collaborate with the client firms to create a 100-day plan. This outlines KPIs, OKRs, and strategies for achieving goals. The Founders address hiring, tech investments, and immediate challenges, providing support. Eventually, they transition to weekly meetings to review KPIs and make adjustments, if needed.
With monthly meetings, they can have long-term planning and strategic initiatives. Their value creation team enhances operational efficiency and growth potential by building relationships with partners who offer valuable services at preferential rates. Our network provides advantageous deals with major providers top law firms and tax advisors for our portfolio companies.
Working For The Community
With a commitment to fulfilling social responsibilities and keeping community at the heart. DOMO is deeply committed to corporate responsibility and ethical investing. The firm incorporates the core values into its business practices primarily through our meticulous investment process.
As signatories of the PRI (Principles for Responsible Investing), they rigorously evaluate potential ESG risks associated with their investments. The Founders place a high priority on governance, transparency, and environmental stewardship, which are particularly critical in Latin America given the region’s rich natural resources.
Incorporating these ideas into investment analysis is something DOMO aspires to be a leader in, making sure that their methods improve the social and environmental landscape in addition to producing financial returns.
An Inclusive Approach
The company is revolutionizing the VC space by fostering a diverse work environment, offering an equal chance to all. The goal of the firm is to promote a diverse and inclusive workplace. DOMO.VC just welcomed their first female partner to the firm, which is a noteworthy achievement in a field that is primarily dominated by men.
Currently, women make up nearly half of the company’s team, a proportion that greatly exceeds the industry average. They are dedicated to maintaining and enhancing this representation, continually striving to outperform their peers in creating a more equitable and diverse environment.
Advice For Beginners: Encouraging Entrepreneurs
Latin America is a region brimming with opportunities, largely due to its numerous inefficiencies that need addressing and a population that enthusiastically embraces technology to enhance quality of life and streamline business processes.
The Founders of DOMO.VC actively encourage entrepreneurs to concentrate on local issues rather than replicating solutions from the US or Europe.
Resolving major issues in Latin America can offer a clear economic trajectory and frequently remove the need for fast foreign expansion. They recommend aspiring entrepreneurs concentrate first and foremost on local issues rather than other aspects.
Find more about DOMO.VC on http://domo.vc
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