Everything you need to know about Brazil’s startup scene
Community-driven Brazil Startup Guide
The Argentina startup scene was fun and now Josh and I are in Brazil! So, in this community-driven post, you will find everything you need to know about Brazil’s startup scene.
- What everyone needs to know about Brazil’s startup scene
- Brazil startups with exits
- Why Brazil will attract investors and founders alike
- Brazil founders and startups to watch
- Brazil investors
- Brazil accelerators
- Brazil co-working spaces
- Brazil Afro-Latinos
If something is missing, leave a reply and I’ll update the post periodically.
What everyone needs to know about Brazil’s startup scene
On the deal count front, Crunchbase recorded a total of 242 Series A and B rounds in 2021, up from 136 in 2020. That’s a ~78% year-over-year increase. Brazil was the top destination for funded companies, followed by Mexico, Colombia, Chile, and Argentina.
Venture-capital funding in Brazil in 2021, through October 12, reached a record $6.4 billion, 300% of the amount raised in all of pre-pandemic 2019, according to data firm PitchBook. That exceeded South Korea and Indonesia while surpassing the combined startup investments for Russia, South Africa, Turkey, and Nigeria.
By the end of 2021, startups in Brazil attracted record-breaking levels of funding, with over $9.4 billion raised in the innovation market — almost 2.6 times more than the $3.5 billion notched in 2020, according to The Rio Times.
Growth. Between 2012 and 2020, the number of startups grew by 427%. Statista estimates there are over 13K startups.
Brazilian startups are leading in massive markets such as financial services (4 unicorns: Stone, NuBank, PagSeguro, EBANX) and real estate (2 unicorns: Loft, QuintoAndar) and are primed to disrupt enormous industries further.
Number of VCs. By November 2021, Brazil had 316 VC firms with 55% residing in São Paulo. The second and third largest VC home are Rio de Janeiro and Santa Catarina. At the time, 80% of them were focused on early-stage.
Funding & deals. Brazil has raised $4.1B and represents 58% of all deals closed in Latin America. And according to LAVCA, 30% of Brazil’s VC dollars have gone to e-commerce and proptech.
50% of the top deals done in Latin America and the Caribbean came from Brazil. They included Neon, Creditas, Flash, Solides, and Gupy.
Why Brazil will attract investors and founders alike
Brazil is #1 in LATAM’s VC-Startup scene because of the size of the market, tech adoption, regulation changes, the pandemic, and momentum.
Size of the market. Brazil is the 6th most populated country in the world, has more than 210 million people, and is the world’s 12th largest economy. And its current GDP is larger than other areas with more active VC markets, such as Southeast Asia. That said, Brazil’s land size is nearly two times that of Southeast Asia.
Regulation changes. Albeit historically, Brazil hasn’t made it easy to do business, according to WSJ, in recent years, new regulations in Brazil have promoted competition in industries long dominated by a few giants. Entrepreneurs have greater access to financing from a growing group of venture-capital investors.
Recently a Startup Civil Mark, created by Abstartups and Dinamo, was legislated and will accordingly register tech companies as startups, legally, with other benefits for the sector. This is believed to be a starting stepping-stone to easy things for entrepreneurs.
Tech adoption. Brazil is one of the most connected and engaged digital markets in the world. According to Statista, more than 160 million Brazilians are online. Its population has a 75% internet user penetration, making Brazil the country with the second-largest growth in e-commerce sales, as reported by eMarketer. Interestingly enough, Brazil represents the country with the second most Facebook/WhatsApp users in the world. And according to Americas Market Intelligence, in a report that Mastercard commissioned, more than 100 million people in a region of 650 million have shifted from a dependence on cash to new online bank accounts during the pandemic.
Amid pandemic, many Brazilians went to Nubank for banking, a Brazil-based online challenger bank that raised $750M in pre-IPO financing before going public in December. Nubank now amassed 40 million customers, making it one of the largest digital banks in the world.
Momentum. According to Statista, 6 out of the 10 most valuable Latin American unicorn companies are based in Brazil.
Lower cost of living. The cost of living per person in Brazil is 3Xs lower than it is in the US.
Alright from here on, I share interesting data for you to fall in love with, move to, and invest in Brazil. Enjoy!
Brazil founders and startups to watch
I’d definitely keep an eye on the founders of the 7 (out of 10) most valuable unicorns and decacorn in Latin America in Brazil: Nubank, QuintoAndar, Wildlife Studios, Loft, C6, Mercado Bitcoin, and Creditas. Beyond.
- Nubank ($30 billion): an online bank with its headquarters in Sao Paulo
- QuintoAndar ($4 billion): Established in 2014, QuintoAndar is a startup in Brazil focused on real estate rentals and sales.
- Wildlife Studios ($3 billion): Mobile games developer Wildlife Studios was established in 2011 and has grown exponentially since then.
- Loft ($2.9 billion): Another real estate-focused company, Sao Paulo-based Loft was established in 2018 and facilitates property rentals and sales, as well as providing financing to prospective buyers.
- C6 ($2.1 billion): C6 is another online bank, which was founded in 2018, providing current accounts, credit cards, and facilitating investments.
- Mercado Bitcoin ($2.1 billion): Brazil’s largest cryptocurrency exchange.
- Creditas ($1.7 billion): Formed in 2012, Creditas is a fintech company that facilitates secured credit, and has grown to become one of the most significant startups in Brazil
- NG Cash: Rio de Janeiro-based fintech focused on the GenZ market. NG Cash offers banking solutions to kids, teenagers, and young adults. They are one of the fastest-growing fintechs in Brazil.
- Medway: Sao Paulo-based edtech. Medway offers an educational platform for medical students and graduates who wish to enter a residency program. Medway has recently closed their USD 15m Series A round, led by Softbank.
- Bipa: Sao Paulo-based fintech. Bipa offers a very fast and easy-to-use Bitcoin wallet that transacts within the Lightning Network.
- Mara: Sao Paulo-based grocery startup focused on serving the underserved in Latin America. Mara’s co-founder is Ariel Lambrecht, who co-founded 99, the first Brazilian unicorn. Mara has recently raised $6 million in a round co-led by Canary and Caffeinated Capital.
- Memed: Sao Paulo-based health tech. Memed offers an electronic prescription tool for doctors. Memed raised a USD 20m Series C in November 2021.
- Galena: Sao Paulo-based edtech. Galena helps young underprivileged individuals to enter the job market. Galena raised a USD 16m Series A, led by Altos Ventures, in February 2022.
- Nomad: Sao Paulo-based fintech that enables Brazilians to open a US-based bank account and access US investment products. Nomad has recently closed a USD 32m Series B.
- Vittude: women founded mental health startup that helps connect patients with psychologists. Vittude has recently raised a USD 7m Series A led by Crescera Capital.
- Pantys: a women-founded and Sao Paulo-based femtech that created a line of apparel solutions for menstruation, leak protection, and maternity.
- Conta Black: Sao Paulo-based fintech. Conta Black is a community-focused digital bank that offers banking services to black individuals.
Brazil startups with exits
In Q1’2022, Brazil took the #2 spot on the list of largest M&A deals globally when Coinbase brought 2TM for $2.2B.
As LAVCA captured, 8 out of the 10 2021 exits were Brazilian and included: Nubank, GetNinjas, VTEX, Infracommerce, Zenvia, WDC Networks, CI&T, and Allied.
Brazil startups that could IPO in 2022, according to PitchBook:
- QuintoAndar, the real estate company based in Sao Paulo, Brazil is worth $5.1 billion.
- Wildlife is a gaming startup that is part of the list. It originated in Sao Paulo, Brazil and is worth US$3 billion.
Brazil investors
Brazilian VCs made up 40% of CBInsight’s Q1’22 most active and top Latin American and Caribbean VCs list. VC funds included: Canary with 10 deals, Domo Invest with 8 deals, Monashees+ with 7 deals, and Maya Capital with 6 deals.
Brazil-based VCs
- ACE Startups (Sao Paulo): Former startup accelerator, now seeks to invest in early-stage startups, from seed rounds to Series A. Since 2012 it has had 14 exits.
- Astella Investimentos (Sao Paulo): Astella Investimentos is a São Paulo-based early-stage venture capital investor for “heroes,” or entrepreneurs looking to make a large-scale impact on consumers.
- Bossanova Investimentos (Sao Paulo): Bossanova Investimentos is the most active VC in the LATAM, focused on pre-seed stage B2B or B2B2C technology companies. With a network of 1000+ founders, they help the entrepreneurs to deal with the challenges to scale.
- Canary VC (Sao Paulo): Canary VC is a seed stage fund that trades 10–15% equity for investments in tech companies that are at a critical juncture in their growth. They focus on the vision of the entrepreneur and the strength of the starting team as they select their ventures.
- Confrapar (Sao Paulo, Rio de Janeiro, Belo Horizonte): Confrapar is a Brazilian fund manager focused on technology companies with offices in São Paulo, Rio de Janeiro, and Belo Horizonte. Confrapar invests up to USD$12 million in each company and currently has 10 technology companies in its portfolio.
- Domo Invest (Sao Paulo): Domo Invest is a leading venture capital firm in Brazil that invests in best in class entrepreneurs
- DGF Investimentos (Sao Paulo): This Brazilian venture capital firm focuses on small- to medium-sized enterprises in the Brazilian technology market. They have already made over 40 investments, with several successful exits.
- Investidores.vc (Sao Paulo): Brazilian venture capital fund focused on early-stage startups; other than investing is also teaching corporate executives how to become angel investors and democratizing startup investment in Brazil.
- Kaszek Ventures Brazil (Sao Paulo): This Brazilian and Argentinian venture capital firm focuses on high-impact technology companies that want to operate in Latin American markets. Kaszek provides not only capital but also hands-on mentorship, networking, product development, team-building, and plenty of resources to help entrepreneurs develop viable businesses.
- Maya Capital (Sao Paulo): is an early-stage fund that supports bold leaders who are catalyzing change in Latin America.
- Monashees+ (Sao Paulo): Monashees+ is a global venture capital firm based in São Paulo that invests in innovative entrepreneurs at the early stages of their ventures. Their portfolio includes companies that are improving people’s lives through tech, such as Rappi, VivaReal, and Petlove.
- ONEVC (Sao Paulo): ONEVC is a Silicon Valley and Brazil-based generalist seed-stage venture firm focused on investing in entrepreneurs that tackle multi-billion dollar markets with solid product-market fit
- Redpoint eVentures (Sao Paulo): Redpoint eVentures is an early stage venture capital firm located in São Paulo, Brazil. The firm is partners with Redpoint Ventures and e.ventures in Silicon Valley and boasts an impressive portfolio of 15+ companies, including big names like Rappi and Gympass
- SP Ventures (Sao Paulo): SP Ventures is the investment manager of the São Paulo Innovation Fund (FIP), with LPs such as Desenvolve SP, FINEP, FAPESP, Sebrae-SP, CAF and Jive Investments. The fund has a total amount of R$105 Million, focused on technology-based startups in the state of São Paulo, prioritizing Agtechs, Healthtechs and Fintechs companies.
- Startup Angels (Sao Paulo): Startup Angels is an international network that inspires and enables angel investors worldwide, with an office in São Paulo, Brazil’s financial capital.
- Valor Capital Group (Rio de Janeiro): Valor focuses on US/Brazil cross-border opportunities and is based in New York, Menlo Park, and Rio de Janeiro. They look for early to late-stage US or international technology companies seeking to expand to Brazil and Brazilian technology companies. Valor Capital Group companies solve the problems that face the middle class, especially in the fields of education, financial services, and health.
- Warehouse Investimentos (Sao Paulo): This venture capital firm based in São Paulo is focused on technology and “green tech” startups with high-growth potential. Generally, Warehouse Investimentos does not invest in companies with over USD$8 million in yearly revenue already.
- EquitasVC (Sao Paulo): venture capital fund of Equitas (one of the largest asset management firms in Brasil) led by Felipe Mansano, former founder of Beleza na Web and Centralfit. Macro investment themes include B2B Marketplaces, Future of Work, Creator Economy, and Fintechs.
- FEA Angels (São Paulo): FEA Angels is an angel investor group made up of alumni from the School of Economics and Business of the University of São Paulo.
- Urca Angels (Rio de Janeiro): is a Brazilian network of investors mainly composed of former Instituto Militar de Engenharia (IME) Alumni, C-Levels, mentors, former startup founders, professional investors, and managers who are actively involved in the Brazilian startup ecosystem who are interested in new, cutting edge early stage startups on an individual basis.
- Vox Capital (Rio de Janeiro): the first social impact-focused venture capital firm in Brazil. They invest in education, financial inclusion, and health early-stage startups.
International VC
- Softbank Latin America Fund focuses on investing in companies utilizing technologies like artificial intelligence and scout deals in e-commerce and digital financial services as well as blockchain projects.
- ACCION is a fund focused on fintech seed investing. ACCION invests across Emerging Markets and looks for startups that promote positive impact in society. Some of their portfolio companies are Konfio, Clip, and Henry.
- Endeavor Catalyst is a co-investment fund that invests in qualifying rounds of $5M+ raised by Endeavor Entrepreneurs.
- Softbank Latin America Fund focuses on investing in companies utilizing technologies like artificial intelligence and scout deals in e-commerce and digital financial services as well as blockchain projects.
- Rally Cap Ventures is a fund based on a community of over 240 fintech operators across the world that invest in fintech, mostly infrastructure. Focused on emerging markets pre-seed and seed, and with portfolio companies such as Belvo, Pomelo, and Dinie.
- *Kaszek is a venture capital firm that partners with exceptional entrepreneurs to build lasting, high-impact technology-based companies whose main focus is Latin America. In addition to capital, Kaszek offers significant strategic guidance, hands-on operational support, and access to local and international networks. The firm is industry and stage agnostic, investing mainly in seed, series A, and Series B.
- *Magma Partners is a seed & early-stage micro venture capital fund that invests across Latin America and has offices in Mexico. Best known for Fintech, Proptech, and insurtech, Magma is a generalist firm investing $50,000 to $5M from pre-seed to series A. Notable portfolio companies include Kushki, Albo, Nuvocargo, Billpocket, Fanatiz, Houm, Yana, and more.
- *Monashees is a Brazilian venture capital firm active globally that invests in entrepreneurs committed to creating innovative solutions for a new world. Investing in the beginning stages and following alongside the companies that are revolutionizing markets, creating value, and improving people’s lives through technology.
- Latitud Fund is a pre-seed & seed rolling fund born in 2021 investing across all sectors and geographies in Latin America. Latitud is targeting 15 quarterly investments, the majority of which are coming from the Latitud community of entrepreneurs. Notable investments include Pomelo, BHub, Dinie, Kocomo, Reworth, Clubbi, Finkargo, and many more!
- The Venture City is a female-founded pre-seed & seed VC who believes that founders and ecosystems have no zip code. Committed to building a diverse network of companies, stakeholders, and ecosystem of partners in emerging tech hubs through capital and expertise.
New VCs on the LATAM block include Anthemis, Picus Capital, Flash Ventures, Kayak Ventures, and MGV Capital.
Brazil accelerators
- Aceleradora de Startups (Belo Horizonte)
- Brinc Brazil Food Tech Program (São Paulo): The Brazil Food Technology Accelerator Program was recently launched after the expansion of Brinc into the South American market. Brinc partnered with Lever VC, Grupo Baobá, Lifely VC, Outcast Ventures, Angel Ventures, Bioma Food Hub, and Food Venture.
- Darwin Startups (Florianópolis)
- Oxigênio Aceleradora (Sao Paulo): A startup accelerator focused on the financial services industry
- Wayra Brazil (Sao Paulo): Wayra is a top international accelerator operating throughout Latin America to improve telecommunication technology
- Distrito (Sao Paulo): Distrito is an open innovation platform for startups, corporations, and investors. Distrito connects founders with potential investors, business resources and corporations looking for partnerships.
- Black Rocks (Sao Paulo): a women-founded company that helps the black population of Brazil access highly innovative and technological environments. Their accelerator Grow Startups is aimed at B2B and B2B2C startups with at least one black person on the founding team, and is currently in their 3rd batch.
- WOW Accelerator (Porto Alegre): one of the oldest startup accelerators in Brazil, located in Porto Alegre, does 3 batches per year with 8 to 10 startups. Focused on early-stage startups, helps then with seed money and methodology to get to product market fit.
Brazilian Startups Association
Danilo Picucci, Director of Community at Associação Brasileira de Startups, shared with us the following: The Brazilian startup ecosystem is one of the few around the world that is represented by an NGO, the Brazilian Startups Association (Abstartups). The NGO was founded in 2011 and its main focus is to represent, promote and connect startups all around the continental country. It has more than 7K startups associated which have access to a lot of perks (AWS, Pipedrive, Pipefy, Miro, etc) and services. It is also the producer of the biggest LATAM startup event, the Annual Startups and Entrepreneurship Conference (CASE), which is held in November, annually.”
Brazil co-working spaces
São Paulo
Florianópolis
Salvador
Fortaleza
Goiânia
Teresina
Porto Alegre
Belo Horizonte
Juiz de Fora
Manaus
São Luis
Uberlândia
Vitória
Rio de Janeiro list
Brazil Afro-Latinos
Largest population of Afro-Latinos
Did you know that Brazil has the largest population of Afro-Latinos? It does. In Brazil, about 50% of people are of African descent.
Salvador’s startup-scene
There largest population of Afro-Latinos is in Salvador, Brazil and I’m super curious to explore the startup scene there because as Paulo Rogério Nunes co-founder of Vale do Dendê, told the Rest of the World:
São Paulo — the financial capital — and Rio, the tourist capital. But Salvador, the capital of Bahia, was the country’s first capital. It’s the cultural capital of Brazil and it’s at the heart of Afro-Brazilian culture. What’s different here is the creative economy. Salvador is the birthplace of Brazilian culture — samba and capoeira started here. This strong culture is a foundation for a very creative society. If you combine the creativity, innovation, and problem-solving skills we have here with technology, it makes something very special.
Additional reading
- Endeavor | Soft Landing in Latin America
- Astella Investimentos | Brazil Startup Map by Guilherme Lima
- Latitud | YC Companies in LATAM by batches
- EBANX | Beyond Borders 2020/2021 Study
- GSMA | The Mobile Economy Latin America
- AMI | Latin America Market Intelligence Research
- Cepal | Enabling Latin America and the Caribbean to better harness e-Commerce and digital trade
- Contxto | Latin American tech, VC, and startup news outlet
- Tracción | Podcast about all-things growth and startups in LatAm
- Leaders Legue | Most active VC funds in Brazil overall -
- Finnovating | Fintech startups to follow
- Failory | 107 startups in São Paulo
- Startup Stash | Top Brazilian Startups To Watch in 2022
- Startup Universal | Brazil Startup Ecosystem Summary
- Startup Genome | Sao Paulo Investors in the Ecosystem
- Abstartups | Brazilian Startup Community Report (Yearly)
About author and collaborators
Lolita Taub is a GP at Ganas Ventures where she invests in pre-seed and seed community-driven companies in the US and Latin America. With 15 years working within the Silicon Valley ecosystem, she has accomplished $70M+ in sales and made 90+ investments as an angel investor, Scout at Lightspeed Venture Partners, and VC at Backstage Capital and The Community Fund. Lolita is also a Co-Founder of proprietary matching tools Startup-Investor Matching Tool, the GP-LP Matching Tool, and the LaaS community which brings along a community of over 4K+ founders, funders, and ecosystem friends. Forbes and Inc Magazine have featured her as a woman promoting investment in underestimated founders and funders. She has a BA from the University of Southern California and an MBA from the IE Business School. Lolita is currently in LATAM, hunting for unicorns, and most importantly, she is a dog mom to the cutest Dachshund mix, Choco.
Thank you to all contributors: Josh Taub, Alex González Ormerod, Jake Storm, Lucas Lameiras, Pâmela Pinheiro, Pedro Muller, Danilo Picucci, Fer Díaz, Funke, Alied Monica, Caetano Mantovani, and more.
