Despite an uncertain macroeconomic picture, Accel Partners, one of the most successful investment firms in the U.S., is keeping up the pace of investments in Brazil with a new commitment to the online education service eduK.
“We’ve been investing in emerging markets for quite some time,” said Kevin Efrusy, a partner in Accel’s Silicon Valley office. “We’ve had an India fund since 2008 and a China fund since 2004 [and] we’ve been investing in Brazil for the past four years.”
Over that time the firm has seen the Brazilian economy hit some highs, and now, as the economy slumps and the nation appears headed for some economic woes, Efrusy said the important thing was to stay the course.
“Investing in emerging markets like brazil is a little bit different. It takes less intelligence and more patience and frankly — I’ll call it fortitude… In technology investing you know what the pattern is going to be for emerging markets. The blueprint will play out a bit differently but you know the blueprint is going to play out.”
And in that context, with Accel coming off of a successful exit from Lynda.com (acquired by LinkedIn for roughly $1.5 billion), the investment in eduK — no matter the overall conditions of the market in Brazil — can start to look prescient.
Currently, eduK is Brazil’s largest education startup. The company has more than 2 million students enrolled in its 600 courses and is now looking to expand beyond its borders into the rest of South America with the help of $10 million in new funding led by Accel.
The company provides in-depth online classes on subjects like photography, or a range of other topics. The classes can be viewed online for free in one sitting, or viewed asynchronously in a package for which the company charges a fee.
Founded in 2013, eduK was initially backed by Monashees Capital and the U.S.-based Felicis Ventures, and both investors are participating in the new Series B round.
“These emerging markets are never as good as everyone thinks and they’re never as bad as everyone thinks,” said Efrusy. The point for Accel is staying active through the cycles up or down.
Technology investing isn’t directly correlated to macroeconomic trends, according to Efrusy. Silicon Valley and technology companies in the U.S. can be doing well, even as the broader U.S. economy suffers, he said. And the same can be true in emerging markets as well.
So far, Accel has made seven commitments to Brazilian companies ranging from early-stage to very late stage investments. While most of these deals are undisclosed, investments like the $100 million commitment Accel made in QMC Telecom point to the firm’s willingness to put significant cash to work in the Brazilian economy.
“There’s a very strong emotional component to investing and you have to believe and you have to work through doubts and failures,” Efrusy said. “Brazil came about less through hedging [against the U.S.] and more about a few of us went down and became passionate about the market. We dove in and got excited about it.”