10 Reasons Brazil is Latin America's Technology Leader

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Brazil may be notorious for its bureaucracy, political corruption, and economic ups and downs, but entrepreneurs have still found ways to push the country forward on the global technology stage.

After the United States, Brazilians are the second largest users of social networks, and the country has just as many mobile devices as it does people. There are approximately 198 million smartphones in use in Brazil, and the current population is just over 200 million.

International investors, such as China, are also helping Brazil’s tech scene flourish. In fact, foreign investments in Brazilian startups have increased more than 100% since 2013. Promising technology startups and initiatives are abundant in Brazil and spread out across many cities, including São Paulo, Florianópolis, Rio de Janeiro, Recife, and Belo Horizonte. 

Here’s a deeper look at how Brazil maintains its position as Latin America’s largest entrepreneurial and tech ecosystem. 

1. Brazil’s tech scene started in the 1980s with TOTVS

The Brazilian technology scene started in the 1980s with the launch of TOTVS. The business software provider became the largest software company in Latin America, boasting 10,000 employees and providing services to nearly 60% of small and medium-sized businesses in Brazil.

During the 1980s, government initiatives such as the Brazilian Association of Private Equity & Venture Capital (ABVCAP) also launched to help Brazil’s technology ecosystem get off the ground.

2. Most of the global tech giants have offices in Brazil

In 2002, Google selected São Paulo, Brazil as the site for its very first offices in Latin America and many other global tech giants followed shortly after that. Today, Uber, Airbnb, Facebook, Instagram, and nearly every other global tech company have offices in Brazil

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3. Brazil’s government embraces the Internet of Things (IoT) technology

According to statistics, approximately 58% of Brazil’s population has Internet access, and over 100 million people connect using smartphones. One way Brazilian companies are taking advantage of this connectivity is with the Internet of Things (IoT) technology. Approximately 60% of Brazilian companies have invested in IoT research and development. 

The Brazilian government also launched a plan to expand the Internet of Things throughout the country via partnerships and higher education programs. The Brazilian government predicts that IoT projects will contribute US$132 billion to the economy by 2025 in verticals such as smart cities, healthcare, agriculture, and manufacturing. 

4. Facebook opened its first innovation center in the world in Brazil 

In October 2017, Facebook launched its first-ever innovation center called Estação Hack (Hack Station) in São Paulo, Brazil. Estação Hack helps foster entrepreneurship in the local ecosystem by providing free programming and entrepreneurship-related training to young students, professionals, and small- and medium-sized businesses.

Facebook also offers a six-month program for selected startups in Brazil to receive mentorship and access to the Facebook infrastructure.

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5. China is pouring money into Brazilian startups and using Brazil as a gateway to Latin America

Bordering ten other countries, Brazil is the ultimate springboard into the rest of South America. Recently, Chinese technology giants have noticed this potential and are investing heavily in Brazil-based startups. For example, China’s ride-hailing giant Didi Chuxing acquired Brazil’s 99 Taxis in 2018 for a rumored one billion dollars to expand the company into México.

China’s mobile giant Tencent invested US$180 million in Nubank, a Brazilian fintech startup with five million customers, in October 2018. There’s even a service that helps match Chinese investors with Brazilian companies ripe for investment called Chinnovation

6. Movile is Brazil’s startup success story

Movile is a São Paulo-based startup with operations in six countries and over 150 million active users of its apps. Movile is well-known in Brazil for its highly successful mobile services that span across multiple industries including education (PlayKids), food delivery (iFood), ticketing (Sympla), and payments (Zoop).

With more than 1,600 employees, many people say that Movile is well-positioned to become the ‘Tencent of Latin America.’

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7. eCommerce is set to increase 39% by 2022

There are plenty of reasons why some of the largest online retailers in the world are investing in Brazil. Alibaba, Walmart, and Amazon are ramping up their operations to serve Brazil’s 140 million Internet users (three-quarters of which have purchased something online at least one time). 

The Brazilian e-commerce market is growing fast and is expected to increase by 39% by 2022. Brazil represents 42% of all the B2C e-commerce transactions in Latin America, and the rapid adoption of eWallets is a leading factor fueling e-commerce growth in the country. Currently, eWallet usage in Brazil is growing at an annual rate of 27%.

8. Brazil still accounts for a majority of Latin America’s VC investments

Until recently, startup unicorns – or technology startups with valuations over US$1 billion – were few and far between in Brazil. In a less than 90 day-period in 2018, however, Brazil produced three startup unicorns: Nubank, PagSeguro, and 99. 

Brazilian technology companies continue to shatter records, and according to LAVCA, venture capital investments exceeded US$1 billion for the first time in 2018, with a majority of those investments going to Brazilian companies.

9. Brazil is home to more than 338 agtech startups

According to AgFunder, Brazil recently overtook Canada and Australia as the second-largest agricultural exporter in the world. Brazil is a leading producer of coffee, sugar, beef, ethanol, soybeans, and more. This growth is driving the creation of new agricultural technology companies, specifically in São Paulo.

NXTP Labs and SP Ventures have teamed up to launch an agtech accelerator called Pulse in the city. Also based in São Paulo, the Luiz de Queiroz College of Agriculture (ESALQ) incubates agtech companies, and the AgTech Garage is one of the most important agtech think tanks in Latin America. 

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10. Micro-mobility transportation models are taking off

Brazil is abuzz with innovative micro-mobility initiatives which are trying to solve congestion issues in urban areas. Just months after their acquisition by Didi Chuxing, the founders of Brazil’s biggest ride-hailing application, 99, launched a new micro-mobility startup called Yellow. The bike and scooter-sharing service instantly captured the attention of consumers and investors alike and raised a US$63 million Series A round of funding in September 2018. The round was the largest Series A financing ever for a startup in Latin America.

In January 2019, Yellow merged with México’s Grin Scooters to form a new company, Grow Mobility. The combined group currently operates 135,000 vehicles across six Latin American countries.

Brazil remains a leader in technology and innovation in the Americas. Today’s entrepreneurs are pushing the country to become a global leader as well. And as more investment and global tech companies pour into the country, Brazil is well on its way to making that happen.

Looking for more facts about technology in Latin America? Check out our posts on neighboring countries Uruguay and Paraguay.