$100M growth checks prefer caipirinhas now

In 2018, Bruno Maimone sat in a conference room at Warburg Pincus, one of the world's oldest and most disciplined private equity firms, trying to answer a question that had no easy answer: Could they reliably deploy $30 million per deal into Brazilian technology companies?

The pipeline was thin. The scaled companies were few. Brazil had exactly six technology businesses generating $100 million in annual recurring revenue — Nubank, Stone, and a handful of others whose names most global investors had never encountered. The market was complex, heavily regulated, and maddeningly unpredictable. For a firm that had spent six decades building a reputation on rigor and repeatability, Brazil's tech sector required a different kind of conviction — one built on trajectory rather than track record.

Seven years later, the picture has transformed. Warburg writes $100 million checks into Brazilian companies — consecutively, confidently, and with a pipeline deep enough to be selective. Their Brazilian holdings grew 37 percent organically last year. Year to date, they're compounding at 35 percent on top of that.

"We're not seeing those numbers in the U.S.," Maimone said. "We're not seeing them in most emerging markets either."

He is not alone in this assessment. Among global growth investors, the calculus on Brazil has shifted. A market long approached with caution has become one where serious capital is being deployed with intention and conviction.

THE PROOF IS IN THE PIPELINE

The simplest way to understand what changed is to follow the numbers.

That sixfold increase in companies generating $100 million or more in ARR isn't a story about one breakout success or a single category heating up. It's a structural shift in the depth and maturity of an entire market.

Dileep Thazhmon has watched this transformation from the operator's seat. As the founder of Jeeves, a global B2B financial platform backed by Andreessen Horowitz, CRV, and Tencent, he has raised $250 million and built operations across 25 countries. His company's trajectory in Brazil offers a case study in both the market's difficulty and its eventual reward.

"We started in Mexico, then scaled to Colombia," Thazhmon recalled. "The same product that worked in Mexico also worked in Colombia. Then we tried Brazil, and it just didn't work."

For two years, Jeeves attempted to transplant its playbook into the Brazilian market. For two years, the playbook failed. The company had product-market fit everywhere else in Latin America. Brazil refused to cooperate.

"It took us about two and a half years to understand that you can't adapt for Brazil," Thazhmon said. "You have to build for Brazil."

Today, Brazil is Jeeves's largest card market and its second-largest market globally. The company grew 400 percent in Brazil this year alone. By early next year, Brazil will surpass every other market in the company's portfolio.

The pattern is not unique to Jeeves. It is, in many ways, the defining characteristic of Brazil's current moment: punishing to those who underestimate its complexity, extraordinarily rewarding to those who earn the right to operate there.

THE ARCHITECTURE OF DIFFICULTY

To understand why global products fail in Brazil, you must first understand what makes Brazil different — not merely complicated, but structurally distinct from every other market in Latin America.

Start with payments. Brazil operates three parallel payment infrastructures: PIX, the instant payment system launched by the Central Bank in 2020; Boleto, the bank slip system that remains essential for certain transaction types; and TAG, the toll and fleet payment network. From the outside, this looks redundant. From the inside, each system serves a specific function that the others cannot replicate.

"Coming from outside, you ask: why do you have three of them?" Thazhmon said. "Then you learn why you need three of them."

Add to this the complexity of installment payments — a consumer behavior so deeply embedded in Brazilian commerce that it shapes product design at every level. Then layer in the regulatory requirements: a Central Bank widely regarded as one of the most sophisticated in the world, a fragmented but advanced financial system, and compliance frameworks that reward local expertise and punish assumptions.

Mexico and Colombia, by contrast, maintain closer economic ties to the United States. Their largest trade partner is the U.S. What works in the US often works there too, with adjustments.

Brazil operates on different logic entirely. Its financial infrastructure developed in relative isolation, shaped by decades of hyperinflation, currency crises, and policy experimentation. The result is a market that outsiders often lump in with "Latin America" but that functions according to its own internal grammar.

This is why copy-paste strategies fail. And it is why, once a company masters that grammar, the rewards are disproportionately large.

THE WINNER-TAKE-MOST-DYNAMIC

One of the most counterintuitive insights from Warburg's decades of global investing is that Brazil does not behave like the United States in one crucial respect: market structure.

In the U.S., attractive categories attract capital quickly. Ten well-funded competitors emerge. Markets fragment. Winners must continuously defend their position against challengers armed with fresh capital and aggressive growth mandates.

Brazil works differently. Capital is scarcer. Talent is harder to recruit and retain. And once a clear leader emerges in a category — a company that has raised meaningful capital and established itself as the default choice — that leader tends to run away with the market.

"We see it across our portfolio," Maimone said. "Many categories are dominated by a clear leader with 30, 40, sometimes 50 percent market share. That doesn't happen in most geographies."

This winner-take-most dynamic changes the math on venture and growth investments. In the U.S., backing a category leader means backing a company that will face well-funded insurgents for years. In Brazil, backing the leader often means backing the category itself.

For global investors calibrating risk and return across emerging markets, this structural advantage has become impossible to ignore.

THE TALENT FLYWHEEL

Markets do not mature on capital alone. They mature when the people building companies have done it before.

For most of its history, Brazil's technology ecosystem lacked this layer. Founders were learning in real time. Operators figured things out on the job. The institutional knowledge that compounds across generations — the pattern recognition, the governance instincts, the understanding of what scales and what breaks — was being created from scratch.

That has changed. Brazil has entered its first true compounding talent cycle.

The evidence is visible across the ecosystem: founders who built and exited companies are building again, this time with hard-won frameworks for what works. Operators trained inside Nubank, Stone, iFood and other scaled organizations have dispersed into the market, carrying with them the muscle memory of high-velocity execution. Angels and early-stage investors who were themselves operators now back founders with a level of domain expertise that did not exist a decade ago.

"Ten years ago, Brazil didn't have this layer," Thazhmon observed. "Today, it defines the ecosystem."

This is the difference between an emerging market and a maturing one. Brazil now has the talent infrastructure to support the capital being deployed into it.

THE ANATOMY OF A GROWTH INVESTMENT

If the preceding sections describe why Brazil has become attractive, the question remains: what does it actually take to get funded?

Warburg Pincus offers a rare window into the mechanics of institutional growth investing. The firm reviews approximately 1,200 companies globally each year. Of those, 150 proceed to full due diligence. Twenty receive investment.

The conversion rate is 1.7 percent.

Understanding where deals die — and why — is essential knowledge for any founder seeking growth capital.

At the top of the funnel, deals fail on fundamentals. The market opportunity, multiplied by the quality of unit economics, does not clear the threshold. A $50 million company growing 60 percent annually is, in Warburg's calculus, less compelling than a $500 million company growing 30 percent. Scale matters. Efficiency matters. The combination of the two determines whether a company warrants deeper examination.

In the middle of the funnel, deals fail on customer evidence. Warburg's diligence process involves conversations with dozens of customers. If the retention story does not hold — if customers are satisfied but not committed, or if growth is masking underlying churn — the investment thesis collapses.

"You might realize it's growing rapidly right now," Maimone explained, "but if customer perception isn't strong, if we're not convinced on retention, that's where deals die."

At the bottom of the funnel, deals fail on trust. By this stage, the business has been validated. The economics work. The market is real. What remains is the human question: Can we partner with this team for the next five to seven years? Is the governance appropriate? Are incentives aligned?

"At the one-yard line," Maimone said, "it's about alignment. We've done the diligence on the business. Now we're choosing a partner."

THE LONG GAME OF RELATIONSHIP BUILDING

The deal that brought Warburg into Voll — a corporate travel and expense management platform acquired from Localiza, Latin America's largest car rental company — took two and a half years to close.

Two and a half years of meetings. Of maintaining contact. Of watching the thesis play out. Of convincing Localiza to sell.

This timeline illuminates something fundamental about growth-stage fundraising: the relationship begins long before the round. Founders who treat investor conversations as transactional — reaching out only when they need capital — misunderstand the nature of the process.

Dileep, who has raised $250 million across multiple rounds, has developed a framework for building investor conviction over time.

"The biggest reason investors preempt rounds is when you tell them something, come back in six months, and hit that number," he said. "Then you tell them again, come back in six months, and hit it again. They learn that what you're saying has value."

The mechanics are simple. Promise $70 million in ARR. Deliver $70 million. Promise $100 million. Deliver $100 million. Each cycle of promise and delivery builds credibility. Each credibility-building cycle shortens the path to a term sheet.

"Eventually, they want to get ahead of the next round," he continued, "because they know it's just going to get more expensive by the time you come back."

This is how diligence windows collapse from months to weeks. This is how founders gain leverage in negotiations. This is how relationships compound into partnerships.

THE TALENT EQUATION

One of Dileep's most critical lessons as a founder had nothing to do with product or market fit. It had to do with people.

"The number one piece of advice I got from every growth fund was: hire a CFO," he recalled. "And I said, 'No, we're fine. We're growing.' I should have hired a CFO a year before I did."

The challenge of building teams in scaling companies is that the skills required change as the company grows. Early-stage startups need generalists — people Thazhmon describes as "all-purpose athletes."

"You hit the wall, you get up. Hit the wall, get up. Hit the wall, get up. You need that in the beginning, especially if you're doing something that hasn't been done before."

Scaling companies need specialists. CFOs who can build the financial infrastructure for institutional capital. Credit risk experts trained at Capital One who understand underwriting at scale. Country leaders with deep local knowledge who can translate global strategy into local execution.

For Jeeves, finding the right leader for Brazil took eight months of searching, interviewing, and saying no to candidates who were almost but not quite right.

"If you're a three-year-old company, eight months is one-fourth of your life," Thazhmon acknowledged. "But for some positions, you can't shortcut it. We tried different versions. They didn't work."

But the patience paid off. After hiring their Brazil country leader, Jeeves grew 400 percent in the market within a year.

Warburg's data takes this further. After six decades and hundreds of portfolio companies, the firm has analyzed the relationship between team composition and investment outcomes. The finding was counterintuitive: outcomes do not correlate with the total number of A-players on a team. They correlate with having A-players in the specific roles that matter most for that particular business.

"For some companies, the CFO is the key position," Maimone explained. "For others, it's operations or sales. Know which two or three positions matter for your business — and take the time to get those right."

THE GLOBAL EXPANSION QUESTION

"The base rates for a Brazilian technology company going global are really bad," Bruno said. "That's just the data."

The reasons are structural. Competition in developed markets is intense. Incumbents are well-funded. Brand recognition starts at zero. Local leadership must be recruited from scratch. The advantages that made a company successful at home — regulatory knowledge, distribution relationships, cultural fluency — do not travel.

"If you go after enterprises in the U.S., there are ten other players who raised hundreds of millions of dollars chasing those same customers," Maimone continued. "Being slightly better probably won't cut it."

This does not mean international expansion is impossible. Warburg has backed Brazilian founders expanding abroad. But the bar is high, and the questions are demanding.

Does the company have a genuine right to win — not a marginally better product, but an actual moat that travels across borders? How competitive is the target market? How much capital has already been deployed there? And can the company win without the advantages it enjoys at home?

Dileep offers his own company as a case study in strategic focus. Jeeves does not compete for U.S. only customers.

"We wouldn't go head-to-head in the U.S. for U.S. enterprise," he said. "There are ten companies better than us for that. But if you're a company that operates in the U.S. and Brazil and Mexico? That's where we win. One login, same software in six countries. It's a big niche, but it's a niche."

The best international expansions, both agreed, begin not with founder ambition but with customer demand. When existing customers ask you to follow them into new markets, the unit economics of expansion become dramatically more favorable.

"That's the best seed for opening a new market in a capital-efficient way," Maimone said. "That was the case for Uber, for Airbnb — companies with strong network effects where customers pulled them into new geographies."

THE AI REALITY

Artificial intelligence has become the unavoidable topic in every investor conversation. For founders, the temptation is to position AI as central to their story — a signal of modernity, a promise of efficiency, a ticket to higher valuations.

Sophisticated investors have grown skeptical.

"If you just slap AI on your pitch, every company's doing that," Dileep said. "No smart investor is going to say, 'Oh wow, you do AI — here's money.' It has to be authentic to your story."

Warburg's investment thesis has evolved to reflect this skepticism. Categories the firm once favored — vertical SaaS, workflow automation — now face harder scrutiny.

"Those were categories we loved five years ago," Maimone acknowledged. "We invested heavily in vertical software across many markets. Now we're very conservative. If you're SaaS-only with no defensible moat, you're exposed."

The question Warburg now asks is not whether AI will disrupt a category, but who is best positioned to capture that disruption. In many cases, the answer is incumbents.

"It was never about running the software," Maimone explained. "It's about understanding the business and having the data. Then the question becomes: do I bet on the incumbent or the new entrant? In many cases, incumbency is a huge advantage."

The evidence from Warburg's portfolio supports this view. One company launched an AI product that did not exist twelve months ago; it now generates 30 percent of their revenue. Another cut R&D payroll by 25 percent while expanding cash margins from 5 percent to 20 percent — in a single year.

"Go copy that," Maimone challenged. "A company that's still growing 30 percent and generating that much efficiency from AI — that's not easy to replicate."

Jeeves offers a practitioner's perspective on what works and what doesn't.

What works: AI-driven underwriting. Everything under $70,000 in monthly spend is now fully automated. Volume has increased 200 percent globally. The underwriting team remains three people.

What doesn't work: AI for data extraction in Portuguese and Spanish. Error rates were too high for underwriting precision. Chatbots? Ubiquitous but unproven. "Everyone says you have it," Thazhmon noted. "Does it really drive usage? We haven't seen it."

The lesson is not that AI is overhyped. The lesson is that AI as a differentiator requires specificity. Generic AI claims earn polite nods. AI that compounds existing moats earns checks.

THE EXIT QUESTION

Every investment thesis eventually confronts the same question: How does this end?

In Brazil, the answer is more constrained than founders often acknowledge.

Brazil's public markets are shallow. The liquidity required to support large technology IPOs does not exist domestically. The U.S. public markets, meanwhile, have grown increasingly hostile to mid-sized companies.

"A successful U.S. IPO now requires a $5 billion market cap — minimum," Maimone said. "ETFs won't cover your stock unless you're a meaningful part of the index. To get there, you need to be between $3 and $5 billion."

This mathematical reality shapes how Warburg underwrites investments. The firm treats IPOs as upside scenarios rather than base cases.

"Given the size of the businesses we typically invest in, an IPO is going to be challenging," Maimone explained. "If we get there, great. If we don't — which is on average the case — we need a good answer on how we exit."

That answer, for most investments, is M&A.

The diligence process reflects this orientation. Before investing, Warburg maps the landscape of potential acquirers. Which international players operate in adjacent categories? Are they already in Brazil? If not, would they be interested? Can the company help convince them that Brazil should be part of their strategy?

"Brazil is accretive to growth for almost everyone right now," Maimone said. "Our portfolio grew 37 percent last year. We're not seeing that in the U.S. That's a pretty good selling point for bringing strategic buyers into the market."

The optimistic case is that Brazil's exit environment will expand alongside its pipeline of scaled companies. In 2018, six companies had reached $100 million in ARR. Today there are 36. If supply of scaled businesses continues to grow, supply of scaled exits should follow.

"The market grew. Supply grew," Maimone said. "I have conviction that exits will grow too."

THE VALUATION TRAP

There is, however, a trap embedded in Brazil's success.

As more capital flows into the market and valuations rise, founders face a choice that will shape their outcomes for years: raise at the highest possible valuation, or raise at a valuation that aligns with realistic exit scenarios.

The math is unforgiving. In Brazil, most exits still occur below $600 million. A company that raises at an $800 million valuation faces a narrow path forward. To deliver acceptable returns to investors, it must exit at $2 billion or more — a threshold few Brazilian companies have reached.

"If I'm getting into a company at a $700 million valuation, I need to answer a lot more questions," Maimone said. "How do we exit at $3 billion? What size do we need to reach? Who are the buyers? I need much more conviction at $700 million than at $200 million."

Founders who raise above the exit ceiling find themselves in mathematical corners. Down rounds destroy morale and dilute cap tables. Extended holds drain operational energy. Governance conflicts emerge between investors with different return thresholds and time horizons.

Thazhmon, who has navigated multiple funding cycles, offers a longer view.

"Valuation isn't fixed," he said. "Look at Ramp — it took three rounds to get back above their peak valuation. And then the last one was massive. Valuation moves. Build for the long term. Investors come and go."

NOW WHAT

The founders best positioned for what comes next share certain characteristics.

They are tightening contribution margins, having learned from the correction of the past two years that efficient growth is more durable than growth at any cost. "The benefit of the last two years is that it forced good unit economics," Thazhmon reflected. "Our metric moved from growth to contribution profit. Now we can add growth back, but the engine is tighter."

They are building optionality — the ability to continue operating without raising capital if conditions require it. "Plan for two scenarios," Dileep advised. "One where you don't have to fundraise, and one where you do."

They are staying disciplined on valuation, understanding that the companies with the most options are the ones that didn't mortgage their futures for a vanity number.

And they are incorporating AI where it compounds their existing advantages — not as a pitch slide, but as an actual lever for margin expansion and competitive moat.

The transformation of Brazil from a cautionary tale to a compelling opportunity did not happen overnight. It required years of infrastructure building, talent development, and institutional learning. It required founders willing to fail for two years before succeeding. It required investors willing to wait two and a half years before writing a check.

What emerges from this patience is a market unlike any other in the emerging world: sophisticated enough to reward excellence, concentrated enough to produce category winners, and mature enough to support the ambitions of world-class operators.

The investors who recognized this early are now deploying capital at scale. The founders who built for Brazil rather than adapting to it are now reaping the rewards.

Brazil has made its case. The rest is execution.

This article is based on a conversation recorded for The J Curve podcast. Watch the full episode with Dileep Thazhmon and Bruno Maimone

Thanks for reading,

Olga 

 P.S. If this issue was valuable to you please share it with a founder who needs to hear it. Let’s build LATAM’s next tech leaders—together

🎙 The J Curve  is where LATAM's boldest founders & investors come to talk real strategy, opportunity and leadership.