Julio Vasconcellos on Scaling Peixe Urbano, Investment Focus and Latin America

Harry Stebbings welcomes Julio Vasconcellos, founder and managing partner of Atlantico. Vasconcellos says he spent roughly fifteen years in technology across Brazil and the Bay Area, first as an operator and founder and then as an angel investor. He started Atlantico to build an early-stage firm focused on Latin America.

In early 2010 he moved to Brazil to help grow Facebook, which he recalls had around one million users there while Google’s Orkut had many more. As a small local operation, he handled many responsibilities. His account emphasizes product-market fit and a founder’s ability to communicate a motivating vision.

He generally puts market and a fitting product or business model ahead of team when assessing an investment, while emphasizing that the team must find and execute that fit. Stebbings asks when founders should persevere or change course. Vasconcellos favors a stable view of the problem and long-term vision, combined with flexibility about how to reach it.

At Peixe Urbano, he and co-founder Alex began in a Rio de Janeiro apartment and rode rapid demand for a daily-deals model. He recalls exhausting work and roughly 1,200 employees in six countries within two years, with more than $100 million in annual net revenue. These are his historical operating figures and the revenue measure he specified.

When a company scales quickly, processes and service quality can break if too many manual steps depend on a rapidly growing team. He says founders may temporarily use people to bridge a gap while building software, but must eventually repair the process. He warns against compromising culture and the way employees treat one another.

Peixe Urbano’s broader vision included local services, food delivery, reservations and content. Vasconcellos thinks the company expanded into too many products and geographies too early. His advice is to establish a defensible position with one product, customer and geography before opening multiple fronts; the timing remains a judgment specific to each business.

When the daily-deals model became less attractive and sustainable than the market had expected, the company had to address many problems at once. He attributes part of the difficulty to expansion consuming cash and management attention. This is his retrospective interpretation, not a complete causal analysis of the business.

He recalls that investors including Benchmark, General Atlantic and T. Rowe Price supported the company when conditions were difficult, not only during growth. General Atlantic lent analysts to help with finance and reporting, he says, while T. Rowe Price helped introduce possible partners. He has longstanding relationships with the investors he praises.

After Peixe Urbano’s sale, he became an entrepreneur in residence at Benchmark. He admired the firm’s focus on early-stage investing and its willingness to say no to other activities. A mentor’s warning that greed can undermine returns reinforced his own desire to keep Atlantico focused, although fund strategy and market labels can change.

Stebbings notes that what was once called a Series A may now be called seed. Vasconcellos agrees that focus should mean knowing the life stage and work where a firm has an advantage, not rigidly following a financing label. A strategy can adjust to market conventions while remaining clear to founders and LPs.

Vasconcellos and Scott Belsky later built Prefer, a future-of-work company that did not find product-market fit despite several years of work. The experience made him appreciate how rare fit can be. He thinks the team may have iterated too quickly and given some versions too little time, whereas Belsky pressed for more product craftsmanship.

He still favors scrappy, evidence-driven iteration but says he now gives design and craft more weight. The right balance depends on the product and the customer’s problem. A polished product is not automatically a fit, and rapid testing alone does not guarantee that a team will recognize one.

The move from angel investing to managing institutional capital changed his responsibilities. An angel can invest in an idea simply because it is appealing; a fund manager has made commitments to LPs about strategy and focus. He says investors must also be prepared to give founders difficult, constructive feedback rather than only act as cheerleaders.

That feedback might be that apparent traction does not yet amount to product-market fit, or that the company needs to change direction or reduce costs. Vasconcellos thinks an outside investor can sometimes help a founder step back from daily pressures. He presents this as his view of the role, while recognizing these conversations can be uncomfortable.

Asked what happens if an investor loses confidence in a founder, he says he had not yet faced the situation completely. He would first have a direct conversation about what is best for the company and its shareholders. If the relationship cannot be constructive, changing the investor’s involvement may be appropriate; the ability to replace a founder is a separate question.

He finds strategic conversations with investors and advisers valuable, but does not believe they must happen only in a formal board meeting. He says mentor Mickey Malka helped him before and after joining a board. Vasconcellos values the empathy of people who have experienced both success and difficulty as operators.

Atlantico’s first fundraising took longer than he expected. He recalls hundreds of conversations and roughly six months to a first close, despite a personal investing and operating record. His advice to new managers is to start with people who know and trust them, then find others who understand the strategy; he does not offer a shortcut.

In an early LP letter he wrote that Atlantico aimed to win and avoid missing exceptional companies rather than simply minimize losses. Some investors reacted negatively to that wording. Mentor and investor Andy Rachleff supported the approach, he says. It reflects their venture strategy, not a promise that losses are unimportant to every LP.

Stebbings argues that a broad portfolio may improve the chance of owning an exceptional company. Vasconcellos favors a balance: he gives a hypothetical portfolio of around twenty companies and says too many positions can dilute time and attention. His assertion that such a portfolio can contain a major winner is an investment belief, not a guarantee.

At the time, Atlantico reserved about 25% of its fund for follow-on investments, compared with the roughly 50% he describes as typical for many early-stage funds. He says the choice supports more emphasis on initial investments. Reserve needs depend on fund strategy, and the percentages are historical descriptions rather than universal rules.

He calls himself an independent thinker rather than someone seeking contrarian positions for their own sake. A bottom-up view may produce a non-consensus investment, and he believes the strongest long-term returns can come from being both non-consensus and right. Disagreement alone, however, does not prove an investment will succeed.

He names angel investments in Ipsy and QuintoAndar among his largest successes and estimates returns of roughly 100 times or more. He says receiving money reinforced his appreciation of venture’s skewed outcomes. These are his approximate personal return claims, with an investment interest, not independently verified fund performance.

One major miss was not investing in Snapchat’s seed round. He recalls that a group of friends encountered a potential Facebook conflict and then dismissed disappearing messages despite strong early numbers. He sees the episode as a lesson about recognizing demand rather than assuming an unfamiliar behavior is a fad.

Atlantico publishes a Latin American digital transformation report. Vasconcellos cites its own index, comparing the value of technology companies from a region with GDP, to argue that Latin America had a lower ratio than the United States and some Asian markets. The index is not a direct percentage of people using technology; its figures are the firm’s historical estimates.

He believes the gap reflects, in part, a later start in building companies and developing talent. He predicts substantial long-term catch-up and value creation, but does not claim the region must reach US levels. Atlantico invests in the region, so his optimism is connected to its commercial interests.

Discussing the pandemic, he says Latin America experienced a digital adoption jump that, in his reading, did not fully revert to its prior trend as some US measures did. He cites Brazilian e-commerce as an example and estimates it was nearly three years ahead of its earlier trajectory. These are historical comparisons and his interpretation, not proof of a permanent effect.

Stebbings worries that global growth investors will retreat from Latin America in a downturn. Vasconcellos acknowledges that crossover funds had pulled back globally but argues dedicated investors with local teams remained. He believes they could finance strong companies at the then-current market size; this is his 2022 assessment, not a guarantee of available capital.

When pressed, he agrees that less capital could increase company mortality and investment losses in the following years. He views some of the preceding boom as atypical and expects a return toward historical loss and follow-on patterns. That prediction should not be mistaken for a verified outcome or a judgment on particular companies.

As an angel, he says he sometimes sold roughly 10% to 20% of a position to realize some gains while retaining exposure. As a fund manager he would consider partial liquidity if it could return meaningful capital to LPs, but generally would not want to sell an entire position early. This is a personal strategy, not an individualized recommendation.

For founders facing the 2022 downturn, he prioritizes staying in business and suggests considering deeper cost cuts to extend runway. He believes leaner, motivated teams can sometimes accomplish more than expected. This is his operating judgment; layoffs and other reductions have real costs, and the interview does not establish that cuts are easily reversible in every case.

In the quick-fire round he names Michael Lewis’s The New New Thing and praises investor Sarah Smith’s people and culture leadership. He also says he has moderated his non-consensus preference: in less familiar markets, a founder’s ability to raise future capital may matter. These are personal views rather than comparative rankings.

He wishes he had anticipated how much time managing LP relationships would require. If starting over, he would put more weight on backers with whom he can have substantive debates, while still recognizing that reporting is part of the job. He also expresses interest in working with the endowment of his alma mater.

He would like fundraising negotiations to become more straightforward and less performative. The latest announced investment he mentions is Fudo, a Latin American restaurant software and point-of-sale company. He reports more than 10,000 restaurant clients and a history of profitability at the time; those are his historical company claims and Atlantico has a financial interest.

Vasconcellos believes adjacent opportunities in Latin America can be less crowded than in the US, potentially making a company larger than an initial narrow market suggests. That is an investor’s thesis and prediction, not an established outcome for Fudo. The interview closes with mutual thanks.