The Next Silicon Valley

Brazilian tech innovation sector booming despite political and economic crisis

by Leonardo Dicker

Although the ongoing political unrest helped drag the national economy to a steep recession in the past couple of years, the tech innovation and startup sector has seen a sharp rise in Brazil, attracting foreign investments, generating considerable revenue and creating thousands of much needed jobs.

Ahead on the statistics, and outside of the more internationally familiar business environment concentrated between Sao Paulo and Rio de Janeiro, is the southeastern state of Minas Gerais. The state, led by its capital Belo Horizonte (which translates to Beautiful Horizon), is now second to Sao Paulo in number of new tech startups, summing up a total of five thousand established tech companies spread over 35 cities state wide.

Just a few weeks ago, for instance, Brazilian tech company Moip was acquired for $ 41.2 million by German global financial services Wirecard. The deal shows a trend in the Brazilian tech market that has been developing in the South American country for the past few years. The sector is already contributing almost 5 percent of the country’s GDP, or over US$ 100 billion, according to Acelera MGTI, the local state-run startup accelerator program. Brazil’s tech sector ranks seventh in the world and first in investments in Latin America, with a 46 percent market share. The goal is to begin the next decade with US$ 4 billion in revenues and the creation of over 75,000 new jobs in the sector.

According to the latest numbers from ABStartups, the Brazilian startup association, there were over 4,000 early stage companies in the country by last December, an 18.5 percent surge in just six months. FinTech and B2B services were in the lead. Venture capital investments are also on the rise, with a 35 percent annual growth rate, and from which 41 percent were directed to early stage enterprises.

Picking up pace

Looking to harness the local vibrant innovation environment that was largely improved by the state’s tech startup accelerator program created in 2012, the first of its kind in the state of Minas Gerais, at the beginning of April Google opened its latest R&D center in Belo Horizonte. Less than two years earlier, Stanford University had already landed in Belo Horizonte for the first edition of its entrepreneurship and innovation program.

And from near zero in 2010, now the country has more than 40 programs on full throttle according to the Brazilian association of accelerator companies ABRAII. Moip itself is part of this transformation. The e-commerce payment solution was incubated for two years by the Acelera MGTI and has publicly credited its success story to the business support received during its incubator period.

MGTI unites all four technology representative institutions in Minas Gerais (Assespro, Fumsoft, Sindifor and Sucesu). It targets business development, investment attraction and institutional and corporate partnerships, leveraging the creation of innovative goods and services that can be globally competitive and help the development of new Brazilian tech enterprises.

Along with contributing to the national economy, through the Acelera MGTI program, we also have managed to establish important partnerships with chambers of commerce all round the world, including UK, Israel, France and Canada. The program even helped startups from Holland, Uruguay and the US, which shows us that the state of Minas Gerais is definitely heading in the right direction.

Leonardo Dicker is the director for international business of Fumsoft, the institution under the MGTI umbrella that coordinates the startup acceleration program Acelera MGTI.

[Photo credit: The Belo Horizonte Technology Park]

Exit mobile version