What do you get when you combine a massive middle-class consumption-oriented population, with businesses looking for diversification opportunities, and a supportive community of innovators, mentors, accelerators and investors? In Latin America, the answer is Brazil, a country of more than 210 million which has quickly built a reputation as an ideal start-up ecosystem.
“Brazilian cities consistently make top 10 lists for digital entrepreneurs,” says Ping Jiang, an investor specializing in emerging markets and undervalued investment vehicles. “No list of emerging startup cities would be complete without a mention of Brazil’s São Paulo, which is a fantastic startup environment.” In fact, the city is home to 2,700 active tech startups.
But it’s not just in São Paulo. Across Brazil, states are vying to attract entrepreneurs with incentives and incubation programs. One such program is Seed, developed in the state of Minas Gerais in 2013. This six-month program is “equal parts accelerator, startup ecosystem, coworking space, and angel investor,” says Jiang. Similar programs can be found around the country in cities large and small.
Start-ups selected for São Paulo’s “SP Stars” incubator program benefit from mentoring and advice from international tech leaders like LinkedIn and Cabify.
Another is Germinadora, which start-up blogger Matt Wright encountered on a recent trip to Brazil. It is an “innovative startup hub trying to change the concept of acceleration and incubation” in which mentors offer their time and talent to support local entrepreneurs. Tech networking events draw people from biggies like Google and IBM, as well as accelerators and incubators and even government representatives, all eager to mentor and support innovation.
Why? Observes Wright:
“Various corporations here in Brazil are investing in innovation events, innovative startup companies, and finding new ways to champion these initiatives. It’s basically R&D on steroids. Without touching the government’s budget, various startups are able to increase the country’s job growth, create solutions for an enormous demographic, and scale their businesses internationally to bring wealth back to Brazil.”
Indeed, while many of those start-ups have focused on keeping their business home-grown, increasingly, Brazilian upstarts are looking beyond the country’s borders for new growth opportunities.
“Dozens of startups born in Brazil have realized they can compete on a global scale and expand their companies quickly by exporting their business models to other regional markets around the world, including Canada, Colombia, Europe, Japan, Mexico, the U.K. and the U.S.,” notes Manoel Lemos, a partner at Redpoint e.Ventures. Making that global expansion possible is a “flurry of equity deals” earlier this year, he says, as well as a significant uptick in international investment dollars coming into Brazilian start-ups.
The rise in start-ups and their global expansion make these exciting times for entrepreneurs and innovators in Brazil. “The spirit of entrepreneurism in Brazil,” says Lemos, “is as infectious as its natural resources are vast.”
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