How tech ecosystem is rising in the biggest economy in Latin America
I know many people talk about Brazil tech ecosystem. But I didn’t find anything dedicated to exploring Brazil tech economy for foreigners. As I worked with entrepreneurship for almost 5 years at Endeavor and recently joined RD (which is supported by Endeavor), I decided to start writing about technology in Brazil. Most of all: I strongly believe in economic development as a key engine for social development – if worked along with social inequality policies. We can progress faster being inspired by other countries and cultures – so why not connecting with other people and showing how we are doing.
For this first post, I bring an update for those who don’t even know about Brazil. The chart below shows how our GDP performed in the past years:
The current moment – and the opportunities
Last year, Brazil’s GDP was very close to the same score we had in 2009. Economic factors, such as commodities prices and inflation, influenced the fall. Also, political crisis and corruption investigations involving Brazilian biggest companies (construction and oil & gas) reduced investments. And economically speaking, it also helped Brazil coming back 7 years.
Despite all these issues, there is a good reason to believe: tech scene is growing fast and Brazilian startups are booming. First evidence is the increase of money invested by VCs. Also, the number of local VC firms and investments made by foreign firms has been growing – especially by Silicon Valley funds.
According to ABVCAP (NVCA for Brazil), investments along 2015 made in venture capital in Brazil totaled U$350 million. Last year, 99 (urban mobility, biggest Uber’s local competitor, acquired by Chinese Didi) and Nubank (a digital B2C bank) raised more than U$370MM (200 and 170, in equity and debt financing rounds, respectively). More than that, these companies are helping to increase the local ecosystem, setting the rule for new entrants.
Brazil tech landscape – A snapshot on verticals and industries
SaasHolic (local community blog about Brazilian SaaS industry) recently published a research of SaaS in Brazil. Almost 600 Brazilian SaaS companies are serving enterprises, SMBs or consumers. There’s also a great opportunity for investors: 70% of the companies have never raised any money. Despite this fact, we also have cases emerging and becoming significant businesses: Neoway, a big data and analytics solution for companies, raised U$75mi this year in 2 rounds (U$45mi led by QMS Capital and U$30mi by Temasek). A year ago, TPG Growth led a U$19mi round in Resultados Digitais, a digital marketing platform for SMBs in LatAm.
As agriculture is an important economic vector for Brazil, the startup ecosystem is heating up for this sector. Agriculture responds for almost 25% of Brazil’s GDP and there are very big players doing business in Brazil. Hexagon noticed the importance of Brazil and acquired Arvus, a precision agriculture provider, expanding its footprint in Brazil. SP Ventures, a venture capital firm based in Sao Paulo, is also feeding the ecosystem by investing in AgTech startups, along with Monsanto, Microsoft and other big corporations which sees Brazil’s vocation for agriculture.
Help us with your opinion
Brazilian entrepreneurs are inspired by the best and learning with our own and others mistakes. Entrepreneurs are helping to develop our country and to create Brazil tech ecosystem. These were a few examples of companies made in Brazil which are growing and inspiring other people. We’ve been seeing different industries adding more technology – from agriculture to banks, services, retail and many others. Foreign venture funds are also coming and investing in Brazil.
Want to help us? Write your suggestions of what you want to see to [email protected] or fill the form below. For the next posts, we’ll be talking more about different companies, industries and people with a common denominator: technology-enabled for the Brazilian progress.
PS: you can find more info about the writer here.