Brazil is emerging as one of the most attractive markets globally for search funds and entrepreneurship through acquisition (ETA).
As the search fund model expands beyond the U.S. and Canada, international activity has increasingly concentrated in Europe and Latin America. IESE-linked tracking suggests that Latin America now represents roughly 40% of the international traditional search fund market, second only to Europe at around 50% (see the Latin America Search Fund Study 2022).
Within Latin America, the Brazil search fund market stands out.
Not because it is the most mature search fund ecosystem globally. It is not. But because it combines something rare: continental scale, a vast founder-owned SME base, and an ecosystem that is beginning to compound.
Early outcomes were mixed. Today, the market is no longer theoretical.
Search funds in Brazil are acquiring, operating, scaling, and beginning to generate early exit validation. What was once experimental is now institutionalizing.
At Moonbase Capital, we believe the next decade of ETA in Brazil will be driven by succession-led deal flow, operational value creation, and long-duration ownership in under-institutionalized lower middle markets.
The Evolution of the Brazil Search Fund Market
Brazil’s search fund story began in the mid-2010s with pioneers such as Taqia Capital, founded by André Freire and Marcelo Novaes. They acquired IS Entrega, a logistics and delivery company, which they continue to operate today. The broader development of the ecosystem over the past decade is covered in Brazilian business press, including this 2025 retrospective on the first ten years of search funds in the country.
A defining example of scaled execution is 220 Capital, led by René Almeida and João Luis P. Lima. The São Paulo-based fund acquired Agasus and built it into what became Voke. Consistent operational focus turned a solid business into a market leader and one of Brazil’s most cited search-fund case studies.
Over the past decade, the Brazil search fund market has expanded meaningfully. More searchers have launched. More acquisitions have closed. The ecosystem has moved from isolated transactions to a growing operating base.
IESE-linked research counted roughly two dozen traditional search funds raised in Brazil as of 2022 (see the same Latin America study above). By 2025, several positive exits had been reported by industry media and company announcements.
While still younger than the U.S. market, Brazil is clearly in the institutionalization phase.
Ecosystem Challenges and Opportunities in Brazil
Brazil has over 210 million people, according to the World Bank, and is one of the largest economies in the world. It is also characterized by a vast long tail of founder-owned businesses. That is precisely the type of landscape that makes entrepreneurship through acquisition viable.
Brazil’s economy is heavily service-oriented. According to Brazil’s national statistics agency IBGE, services were a major driver of GDP growth in recent years (see IBGE national accounts release)
Many attractive ETA targets sit in fragmented and resilient sectors such as:
- B2B services
- Healthcare and specialty services
- Logistics and infrastructure support
- Outsourced industrial services
- Vertical market software
- Consumer essentials and recurring retail services
These businesses often have strong local positioning, recurring cash flows, and significant room for professionalization.
Brazilian SMEs are resilient, but they operate within a complex environment. Taxation, regulation, and bureaucracy create friction. For undisciplined capital, this is a deterrent. For capable operators, it can be an opportunity.
Searchers who introduce professional systems, financial controls, and strategic focus can unlock value that remains inaccessible to passive buyers.
In Brazil, complexity can become a competitive advantage.
Searching in Brazil: A Structurally Attractive Environment
Brazil does not guarantee easier outcomes. What it offers is structural depth.
Key ingredients supporting the Brazil search fund thesis include:
- A large succession-driven SME landscape
- Relatively low institutional buyer density in the lower middle market
- Receptive founder dynamics when positioned as stewardship
- Significant operational upside post-acquisition
Some early academic tracking suggests strong acquisition completion rates among Brazilian searchers, though sample sizes remain small. For global comparison, Stanford’s 2024 Selected Observations report provides international benchmarks for acquisition outcomes.
The takeaway is not that Brazil is easier. It is that Brazil is underpenetrated relative to its economic scale.
Early Exit Signals in the Brazil Search Fund Market
While still early in its lifecycle, Brazil is beginning to produce search-backed companies that attract global acquirers.
In 2025:
Labsoft, a Brazilian laboratory information management software company previously acquired by Kilimanjaro Capital, was acquired by Confience.
i4pro, an insurance software company acquired by Angulo Capital, was acquired by Banyan Software.
Agger, a leading insurance Saas company acquired by Arco Capital in 2019 was bought by Dimensa.
These exits matter less for their headline numbers and more for what they signal. Brazilian search funds are building assets that attract sophisticated international buyers.
Exit validation remains early, but the trajectory is clear.
Brazil Search Fund Deal Structuring: Operating Without Bank Leverage
One defining feature of the Brazil search fund market is acquisition financing.
In many traditional search fund geographies, transactions are financed with 40 to 60 percent senior bank debt. In Brazil, that structure is far less common.
Brazil’s benchmark interest rate, the Selic, reached 14.75 percent in 2025 according to the Central Bank of Brazil.
At those levels, acquisition leverage often becomes uneconomic. In addition, Brazilian banks typically require hard collateral such as real estate or machinery. Many search targets are asset-light service or software businesses where value sits in cash flow rather than tangible assets.
As a result, Brazil acquisition financing has evolved differently.
Search funds rely heavily on alignment-based structures:
Vendor Loans (Seller Financing)
The seller effectively becomes the lender. These loans are often indexed to inflation or local benchmark rates, aligning returns with Brazil’s macroeconomic environment while reducing upfront equity needs.
Earnouts
Earnouts help bridge valuation gaps and tie a portion of the purchase price to post-closing performance.
Deferred Payments
Acquisitions frequently include meaningful deferred consideration, with part of the price paid over several years. In a market where traditional leverage is limited, deferred payments function as a practical substitute, lowering capital intensity while keeping sellers economically aligned.
In Brazil, ETA is less about financial engineering and more about structure, discipline, and operational execution.
What We’re Hearing in the Field
In conversations with Brazilian searchers, one theme repeats: many founders may not know the term “search fund,” but they understand succession.
Searchers are often perceived differently from traditional private equity. They are viewed as long-term operators who intend to preserve culture while growing the business.
According to Moonbase interviews with local operators, entry multiples in the Brazil lower middle market frequently land in the mid-single-digit EBITDA range. Returns depend heavily on execution, discipline, and structure rather than leverage.
This alignment dynamic, combined with generational transition among SME founders, makes the Brazil search fund market particularly fertile.
Outlook: Brazil Entering Its Compounding Phase
From pioneering acquisitions in the mid-2010s to a growing and increasingly visible ecosystem today, Brazil stands out as one of the most promising markets for entrepreneurship through acquisition outside North America.
The elements are in place:
A deep founder-owned economy.
A growing base of trained operators.
Creative and locally adapted deal structuring.
Early signs of exit validation.
At Moonbase Capital, we believe Brazil is entering its compounding phase.
The opportunity is no longer theoretical. It is unfolding.