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Valor Opportunity Fund I, LP

Project number 12851-01
Country Brazil
Sector Investment Funds
Status In implementation

Informação geral

Company name
Valor Venture Management, LLC
Investment type Equity
E&S category
FI-2
Disclosed date
Projected board date
Approval date
Signed date
Team Leader
Ferro De Sanctis, Carlos Numen

Informação financeira

Financing amount $ 10,000,000
Financing Currency
USD

Client
information

Name: Scott Sobel
Phone number: 212-803-7174
Email: scott.sobel@valorcapitalgroup.com

PROJECT
SCOPE
AND
OBJECTIVE

The Project consists of an investment of up to US$10 million in the Valor Opportunity Fund I (“VOF I” or the “Fund”), which aims to provide growth equity for innovative and technology-enabled companies in Brazil.

VOF I will generally invest in mature venture-backed companies (Series B+) in technology, internet and services sectors. VOF I will be managed by Valor Venture Management, LLC (“Valor”). Established in 2014, Valor is one of the most active Venture Capital (“VC”) firms investing in Brazil with 9 unicorns in its track record. VOF I has been designed to capture upside from Valor’s promising portfolio companies.

The Fund will primarily invest in breakout portfolio companies, which require larger amounts of capital than the investments targeted by Valor’s early stage funds. VOF I may also invest in businesses that are not in the portfolios of those funds, including U.S. based global dominant technology companies seeking expansion in Brazil.

The investment is an opportunity to increase IDB Group’s support to the LAC tech ecosystem, channel additional resources to the sector through co-financing opportunities, and develop industry capacity with an experienced investor in the sector. IDB Group’s coordinated investments in VOF I and VVF III, through IDB Invest and IDB Lab, respectively, are an opportunity to deliver a comprehensive solution across the life cycle of technology and innovation start-up companies in LAC.

Environmental
and
Social
Review

  1. Scope of Environmental and Social Review. The environmental and social review of the proposed transaction was carried out through desk research, a client web-conferencing call, and a pipeline discussion. Valor has been fund managers for operations with the IFC and IDB Lab. They are new clients to IDB Invest and will make minor enhancements to their existing Environmental and Social Management System (ESMS) for the fund in question. 
  2. Environmental and Social Categorization and Rationale. The proposed project is classified as an FI-2 per IDB Invest’s Environmental and Social Sustainability Policy. Equity investments to be supported by the Fund will be in the Financial Services, HealthCare, Education, Logistics, Retailtech, Enterprise softwares/SaaS technology sectors and transportation technology sectors. Investments are expected to be made in a limited number of companies, averaging US$ 10-15 million per investment. Category A sub-projects, per IDB Invest’s definition, will be excluded.
  3. Environmental and Social (E&S) Risks and Impacts. The main E&S risks of this project are associated with the Fund’s capacity to identify and manage the E&S risks associated with its investment activities. The Fund Manager will be expected to apply best practices in identifying, mitigating and managing any issues found in investments. The Environmental Social Health and Safety (ESHS) impacts and risks associated with investments in the technology sectors and subsectors are likely to be minimal in nature.     
  4. Mitigation Measures. Valor currently has an Environmental and Social (E&S) Policy, an E&S officer and conducts basic E&S risk screening on its investments. The Fund Manager will be required to ensure that all investments comply with IDB Invest’s Exclusion List, applicable E&S local laws, and apply an ESMS consistent with Performance Standard 1. The Fund’s ESMS will include a basic categorization guide, updated due diligence checklist, legal clauses and monitoring procedures. Valor Capital Group will define action plans as necessary with companies and monitor their performance. The Fund Manager will be required to provide an annual Environmental and Social (E&S) Compliance Report and also E&S due diligence reports of the first three investments to IDB Invest, after an ESMS update. The Fund will be expected to analyze, categorize and propose mitigation measures consistent with its Policy and ESMS. The Fund manager will be expected to develop a comprehensive Human Resources (HR) policy with an internal grievance mechanism. The Fund is not expected to finance any high-risk sectors.  See below for a list of actions defined under this transaction.
  5. Environmental and Social Action Plan

Activity

Description

Compliance Indicator

Timeline

ESMS update

Valor will formalize its practices in an updated ESMS system and present that to the investment committee. The ESMS will follow IDB Invest requirements, the IDB Invest Exclusion List, and IFC Performance Standard 1

Updated ESMS

9 months post disbursement

 

 

 

Review of the first three operations (after ESMS update)

Valor will provide detailed E&S due diligence reports of the first three operations (prior to investment), with aim to; (i) confirm the categorization and level of analysis undertaken, and (ii) review the proposed action plans, if any

E&S due diligence reports and action plans

9 months post disbursement

E&S capacity building

Senior management, investment officers and analysts will be trained on the ESMS updates and IFC Performance Standards. New personnel will also be trained

Certificates of training completion

(annual reporting for new personnel)

6 months post disbursement

Development of HR Policy and internal grievance mechanism

An HR policy will be developed for the Fund and will include an internal grievance mechanism in accordance with IFC Performance Standard 2

HR Policy with internal grievance mechanism

6 months post disbursement

6. Contact Information For project inquiries, including environmental and social questions related to an IDB Invest transaction please contact the client (see Investment Summary tab), or IDB Invest using the email divulgacionpublica@iadb.org. As a last resort, affected communities have access to the IDB Invest Independent Consultation and Investigation Mechanism by writing to mecanismo@iadb.org or  MICI@iadb.org, or calling +1(202) 623-3952.

 

 

For inquiries, comments and requests about the project

For inquiries, comments and requests about the project

Information Request