Credit: Gajus-Images/ Envato ElementsTerracotta and GRI Club sign global alliance
January 19, 2023Real Estate
GRI Club has signed an alliance with Terracotta Ventures, the Proptech and Construtech venture capital company in Latin America. With a goal of raising R$ 300 million by 2025 to identify and invest in startups that serve the real estate market, the strategy is set to have an impact on more than 500 startups and 900 companies in the sector over the next three years.
The agreement, which was announced at the end of last year during the Brazil GRI 2022 event, aims to attract foreign capital and simplify the internationalisation process for both Proptechs and Construtechs in Brazil as well as for the capital manager itself. Bruno Loreto, one of Terracotta's founding partners, believes that the relationship with a global organisation specialised in the real estate market such as GRI Club, has the potential to push the company to the next level and drive up both business capacity and the synergy between the technology sector and the real estate market.
The emergence of hundreds of Proptechs and Construtechs over the last few years has created the need for a specialised curatorship capable of predicting market movements and identifying disruptive trends in order to anticipate which solutions can have a truly positive impact on the industry.
As part of the internationally operating 8 Capital Group, GRI Club recognises that this strategic alliance with the extensive tech sector experience brought to bear by Terracotta will yield positive results for both organisations through the delivery of market intelligence and increased proficiency.
“In the midst of so much innovation, the challenge for our members is to filter out what is actually relevant, not just for the daily life of the company, but for its future. And it is in this context that we understand how Terracotta will play an essential role in curatorship and intelligence, providing more agility and expertise to the choices of our members”, explains Gustavo Favaron, CEO of GRI Club and 8 Capital.
In just three years of operation, Terracotta Ventures - which has Marcus Anselmo as another founding partner - has reached a solid base that revolves around 45 investor groups. These investors include companies in the real estate and construction sectors, as well as family offices and capital managers, with a combined annual revenue of almost R$ 100 billion.
Following the best year of performance since its creation in 2019, Terracotta plans to close out 2022 with a total of eight investments, six of which have already been signed. On average, the company invests between R$ 2-3 million in startups.
Bruno Loreto says that Terracotta's job is to be able to interpret market signals and make wise investment decisions based on these insights, as well as to support partner investors. This is another point of synergy between GRI and Terracotta: knowing the pain points in the market and seeking solutions for specific problems in the construction chain and the real estate sector in order to meet the needs of club members.
The executive also believes that the year 2022 was fundamental for the maturation of the market. “After a period of excess capital and a subsequent increase in inefficiency, we are now in a position to make much more judicious investments”, says Loreto.
Terracotta’s Managing Partner highlights a period of inversion in the market which created pressure from a short and medium-term perspective and forced companies to prioritise performance to the detriment of growth. Regarding the future, Loreto points out: "We expect to go at the same pace in 2023. We see a window of opportunity to assemble a new portfolio in these two years of a less active market, because the cycle is likely to repeat itself after the return. We predict that this will be the case as the interest rate has reached a level of stability in Brazil and could start to fall from next year, perhaps returning faster than in other markets.”
Written by Emily França and translated by Rory H.
The agreement, which was announced at the end of last year during the Brazil GRI 2022 event, aims to attract foreign capital and simplify the internationalisation process for both Proptechs and Construtechs in Brazil as well as for the capital manager itself. Bruno Loreto, one of Terracotta's founding partners, believes that the relationship with a global organisation specialised in the real estate market such as GRI Club, has the potential to push the company to the next level and drive up both business capacity and the synergy between the technology sector and the real estate market.
The emergence of hundreds of Proptechs and Construtechs over the last few years has created the need for a specialised curatorship capable of predicting market movements and identifying disruptive trends in order to anticipate which solutions can have a truly positive impact on the industry.
As part of the internationally operating 8 Capital Group, GRI Club recognises that this strategic alliance with the extensive tech sector experience brought to bear by Terracotta will yield positive results for both organisations through the delivery of market intelligence and increased proficiency.
“In the midst of so much innovation, the challenge for our members is to filter out what is actually relevant, not just for the daily life of the company, but for its future. And it is in this context that we understand how Terracotta will play an essential role in curatorship and intelligence, providing more agility and expertise to the choices of our members”, explains Gustavo Favaron, CEO of GRI Club and 8 Capital.
In just three years of operation, Terracotta Ventures - which has Marcus Anselmo as another founding partner - has reached a solid base that revolves around 45 investor groups. These investors include companies in the real estate and construction sectors, as well as family offices and capital managers, with a combined annual revenue of almost R$ 100 billion.
Following the best year of performance since its creation in 2019, Terracotta plans to close out 2022 with a total of eight investments, six of which have already been signed. On average, the company invests between R$ 2-3 million in startups.
Bruno Loreto says that Terracotta's job is to be able to interpret market signals and make wise investment decisions based on these insights, as well as to support partner investors. This is another point of synergy between GRI and Terracotta: knowing the pain points in the market and seeking solutions for specific problems in the construction chain and the real estate sector in order to meet the needs of club members.
The executive also believes that the year 2022 was fundamental for the maturation of the market. “After a period of excess capital and a subsequent increase in inefficiency, we are now in a position to make much more judicious investments”, says Loreto.
Terracotta’s Managing Partner highlights a period of inversion in the market which created pressure from a short and medium-term perspective and forced companies to prioritise performance to the detriment of growth. Regarding the future, Loreto points out: "We expect to go at the same pace in 2023. We see a window of opportunity to assemble a new portfolio in these two years of a less active market, because the cycle is likely to repeat itself after the return. We predict that this will be the case as the interest rate has reached a level of stability in Brazil and could start to fall from next year, perhaps returning faster than in other markets.”
Written by Emily França and translated by Rory H.
