Brazil in focus: Why is the startup ecosystem booming?

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Gordon Hunt
Graphic of Brazil startup ecosystem

The startup ecosystem of Brazil is riding a high. Key Brazilian business leaders share their thoughts on why the business economy is thriving and what the country needs to do to maintain this upward trajectory.

As of 2022, Brazil is the world’s twelfth largest economy (Yahoo! Finance) and is experiencing a startup ecosystem boom. Felipe Matos, president of the Brazilian Startup Association, said that Brazilian startups raised almost US$10 billion in investment in 2022. In 2018, there were no unicorn startups in the whole country. Today? Brazil has a total of 30.

Brazil’s largest city, São Paulo, is home to 2,770 startups – the highest number in the country. Such is the city’s presence that 63 percent of all companies operating in Brazil have a São Paulo location.

Rio de Janeiro, meanwhile, is making a huge effort to make the city’s business ecosystem attractive to tech-savvy talent, particularly in the fintech and blockchain industries. This drive has seen Rio rank in the top five for Latin American startup ecosystem performance and first for local knowledge by Startup Genome.

What are the keys to this success? Agrosmart founder and CEO Mariana Vasconcelos said the Covid-19 pandemic actually helped Brazil’s most innovative companies by “accelerating the adoption of technologies in all sectors”.

Jean Sigrist, Mariana Vasconcelos and Felipe Matos discussing the startup ecosystem of BrazilJean Sigrist, Mariana Vasconcelos and Felipe Matos discussing the startup ecosystem of Brazil at Web Summit 2022. Image: Lukas Schulze/Web Summit (CC BY 2.0)

Mariana also pointed to the technological revolution of Brazilian agriculture as critical to modernizing a decisive contributor to national GDP. A 2022 European Parliamentary Research report identified that farming accounts for about one-fifth of Brazil’s labor force, as well as producing much of the national energy supply (almost half of Brazil’s energy supply comes from sugarcane biomass, hydraulic energy and firewood).

Brazil’s rapid adoption of digital fintech services (the World Economic Forum claimed it leads the Latin American region) has also helped to expand the national market. Jean Sigrist, co-founder and chairman of Neon, added the rise of Brazilian fintechs has helped to bring more people into the enterprise economy: “Financial inclusion leads to social inclusion.”

Jean said the cost of banking services in Brazil had also forced many people to share accounts: “Digital banking changed people’s lives and gave them access to financial independence.”

This panel of Brazilian entrepreneurs also looked ahead to the challenges the country may face in continuing its growth into an uncertain economic period and offered their solutions:

“The biggest challenge for our ecosystem is a shortage of talent … and we need to approach this problem by training more people in tech.”

– Felipe Matos

“The challenge [for Brazil’s ecosystem] is maintaining growth while still extending runway.”

– Mariana Vasconcelos

“The capital is there, and we know there are cycles. We need to surf these cycles and ensure we get to the other side with healthy companies.”

– Jean Sigrist

Want to meet other high-impact startup founders? Web Summit Rio will gather more than 900 emerging company leaders together to learn, network, and meet investors. Do you want to be part of the experience?

Main image of Brazil light map: Nook Hok/Shutterstock


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