Transforming Rio into Latin America’s innovation epicenter

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Maeve Harris
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A nighttime image of the Christ the Redeemer statue overlooking the city of Rio de Janeiro. The statue is illuminated by multiple lights, and parts of the city are visible in the background.

A growing tech sector, a home for unicorns, and an innovation capital? Rio is flourishing for a reason.

South American tech continues to flourish, with the tech community gathering to collaborate and prepare for the future.

With Brazil among the hottest startup countries in the world, there’s no better place for Web Summit to put down roots than Rio de Janeiro.

Here’s why Brazil, and Rio in particular, are on the up.

Rio’s strategy for the future

Kicking off Web Summit Rio 2023, the mayor of Rio de Janeiro, Eduardo Paes, addressed the crowd about the profound effect that the event will have on the Brazilian city: “It’s different from every other major event, because of its capacity for major transformation”.

Eduardo also said a strategy was in place for “transforming Rio de Janeiro into the capital of innovation in Latin America”. This strategy is founded on attracting companies to the city, facilitating easier business transactions and qualifying new tech talent for the workforce.

Brazil’s tech sector

The startup scene in Brazil is “in the spotlight” right now. That’s according to B3 CMO Ana Buchaim, who went on to say that tech startups represented six percent of the entire Brazilian GDP in 2022.

Ana also pointed out that Brazilian companies are, on average, sinking almost nine percent of their annual budget into tech, with financial sector companies investing 12 percent.

“The Brazilian financial sector is an example for the whole world,” said Ana. However, Brazil’s tech sector is currently trying to respond to a global economic downturn while aiming for growth.

“I do believe that, here in Brazil, we are living in the second wave of this transformation of business, which means public and private business organizations [are going through] what I call the digital efficiency moment,” explained Viviane Martins, CEO of consultancy firm Falconi.

Falconi CEO Viviane Martins speaking on stage at Web Summit Rio. Image: Vaughn Ridley/Web Summit (CC BY 2.0)

Viviane said the new rule of thumb should be ‘growing with efficiency, not growing at any cost’. And there is room for growth. 35 million people in urban areas in Brazil are digitally excluded, according to Ana.

If companies – private or public – want to scale up, they first need to decide “to invest in people, train them, focus on them,” said Ana.

Building a Brazilian unicorn

“I was really skeptical that Brazil would ever breed unicorns,” said Startups founder and editor-in-chief Gustavo Brigatto, before pointing out that there are now more than 20 in existence.

“Covering technology for such a long time, I never thought that investors would have the appetite or take the risk and pour so much money into Brazilian companies,” said Gustavo.

So how did Brazil become the unicorn capital of Latin America? Quickly and suddenly is the shortest answer.

According to Loft founder and president Florian Hagenbuch, human capital is one of the most important ingredients in reaching unicorn status, with all sorts of expertise – from developers and product managers to designers and operations people – needed.

“That was all very new for Brazil, even in 2018, but I could see that the talent availability was growing quite a bit, versus when I started in 2012,” said Florian.

If human capital is the ingredient, then funding is the catalyst.

According to Florian, what really changed the game was Softbank entering the market in 2019, bringing an initial fund of US$5 billion – five times the total amount of venture capital sunk into Brazil in the previous five years.

“If I had to give people a recipe for building a unicorn, I think it’s to identify a big market and have a true attractive, disruptive proposition, product, or way of solving a problem for customers,” said the Loft founder.

“And then let’s not forget a good 30 to 40 percent is luck,” added Florian.

Don’t miss out on Web Summit Rio 2024. Pre-register for tickets today.

Main image of Christ the Redeemer overlooking the city of Rio de Janeiro at night: Web Summit/Web Summit (CC BY 2.0)

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