São Paulo: the biggest, strongest start-up ecosystem in Brazil
The TechnoLatinas, as South America’s digital founders are collectively known, have a strong presence in the financial capital of Brazil.
Financial TimesSão Paulo has the largest and most powerful start-up ecosystem in this most populous of South American countries, with a spread of companies from early stage to more established.
The case for: As the main financial centre of Latin America, it hosts almost all the offices of multinational corporations present in the region. There is also a big opportunity locally in terms of market size, thanks to São Paulo’s population of 11.8m.
The city hosts a number of entrepreneurship, technology and business events, and there are a number of well-regarded universities.
São Paulo is the fourth city in the world to get a Google Campus, a space designed to nurture start-ups backed by the US-based technology company, when it opens in early 2015.
The case against: The combination of 11.8m inhabitants and 7m cars in a city with only 74km of underground railway lines means tailbacks are commonplace, so it can take hours to travel between locations, even on a good day. Brazilian bureaucracy is also a challenge, say local business people.
Local heroes: Footwear and fashion e-commerce company Dafiti has achieved the highest growth among the large number of e-commerce fashion operators in Brazil. It has raised almost $250m in several rounds of equity funding.
Kekanto is a social network designed for word-of-mouth discussions, where users exchange reviews and recommendations. Since it was founded in May 2010 it has raised $5.6m in equity funding and employs 50 people.
Show me the money: Startup Brazil is a federal government programme that invests about R$200,000 ($87,000) in each venture it approves. Funding for technology projects is also available through the São Paulo-based research programme FAPESP.
The Startup Farm accelerator programme aims to foster entrepreneurship through education, culture and access to investment. Among its alumni are e-hailing app business EasyTaxi and The Delivery (HelloFood).
How easy is it to get to? São Paulo is served by three international airports, and linked to a growing number of Brazilian cities by air as well as the established bus routes connecting with the rest of Brazil. You can fly direct to New York (nine hours and 40 minutes) and London (11 hours and 40 minutes), but you need to change planes to get to San Francisco.
What do the locals say? Yuri Gitahy, founder of Founder Aceleradora, a Brazilian accelerator programme: “There is a deep economic change with the rise of the lower-income classes that generates a massive consumer market that will evolve over the next 10 or 20 years. So it’s not about the ecosystem, it’s about the growing number of market opportunities.”
Augusto Camargo, co-founder of aaTag, a customer loyalty card programme: “The entrepreneurial buzz in São Paulo makes it easy for someone to establish a good business network in a couple of weeks. Our major problem here was structural: it is quite complicated to structure an investment based on options or convertible notes based on the Brazilian legal system.”