Brazil’s Startup Scene Boosts its Struggling Economy
Just five years ago, Brazil was receiving international attention for its apparent immunity to the economic woes plaguing the rest of the globe. Unlike other countries, Brazil was enjoying steady job growth and economic prosperity. One of the secrets to its success seemed to be its thriving startup scene.
Unfortunately, a combination of poor management of fiscal funds and political turmoil, along with numerous other factors, caused Brazil’s economy to take an abrupt about face. The country has since plunged into an economic freefall.
Economists, however, are still left with a kernel of hope: all this economic yo-yoing hasn’t burst the startup bubble. In fact, 2015 saw 195 startups get funding from venture capitalists and angel investors.
Where It’s All Happening
As the financial and commercial capital of Brazil, São Paulo is where the big tech companies come to roost. For example, Google, Uber, and Airbnb all have headquarters there. Local real estate startups have seen incredible success there too, as has the fintech sector. São Paulo is also attractive to young talents in the financial field looking for an alternative to the more conservative and closed networks in Brazil’s traditional banks.
Belo Horizonte / Minas Gerais
The state of Minas Gerais counts 5,000 tech companies, the majority of which are located in the capital of Belo Horizonte. The capital also boasts an impressive tech park located adjacent to the Federal University. The neighborhood of San Pedro in Belo Horizonte was nicknamed “San Pedro Valley” after Silicon Valley in recognition of the area’s concentration of startups.
Rio de Janeiro
You don’t have to look far in Rio to find evidence of the startup culture. Its downtown boasts NEX, the largest co-working space in Latin America. Startups focusing on social problems have gained steady ground in Rio as well as those that cater to the city’s legendary nightlife.
This touristic city in Southern Brazil now boasts 600 startup companies with a yearly growth rate of 15 percent. These numbers aren’t too bad for a country facing an economic downturn.
All of this is good news for foreign investors. In fact, Brazil’s tenuous economic position also makes it hungry for the nourishment of foreign investment. This means that foreign investors are in a position to influence the way things are done, cutting through Brazil’s famous red tape and bureaucracy.