out 26, 2016
São Paulo, The Hottest Latin American City For Entrepreneurs
If you follow Brazil’s news at all, you’re certainly aware that the country has yet to emerge from a long recession. Nevertheless, the world’s ninth-largest economy is showing signs of improvement that can be very appealing to foreign investors, as Brazil’s tech sector has delivered growth rates of more than 20 percent in recent years.
Such numbers put Brazil among the world’s top 10 growth rates for tech companies. Each year, more than $1.3 billion is invested into the creation of new businesses.
São Paulo, Brazil’s largest and wealthiest city, is the best ecosystem for startups in Latin America, and has attracted the world’s big tech giants. In 2016, Google opened a campus for entrepreneurs in the heart of the city. It is only the sixth Google Campus in the world, and proves that Silicon Valley views Brazil as an emerging market for innovation.
According to the most recent Global Startup Ecosystem Rankings, published by Compass, São Paulo is the 12th-best place in the world to open a startup, and the only Latin American city to make it into the Top 20. The report cites market reach, performance, and available funding as the city’s strong suits.
Brazil’s economic capital was ranked above cities like Sydney, Toronto, and Amsterdam. São Paulo also has the third-fastest growing startup ecosystem in the world. Only Berlin and Bangalore (India) have recorded higher rates.
“Sectors such as e-commerce and SaaS [software as a service] remain strong in São Paulo,” says the report, “while new startups with more innovative business models are beginning to gain traction in the fields of mobiles, marketplaces and services.”
Public universities play a huge role in São Paulo’s impressive rankings. Institutions like the University of São Paulo (USP) and São Paulo’s Research Foundation (Fapesp) have promoted entrepreneurship by creating innovation centers. Three of them operate at USP, the University of Campinas, as well as in the São Paulo State University (Unesp).
Although it is nearly impossible to determine exactly how many startups are operating in a hub as large as São Paulo, it’s estimated that up to 2,700 new businesses are currently active. The vibrancy of the tech scene has attracted venture capital funds (VCs). In 2014, VCs have invested more in São Paulo-based startups than they have Seattle, which ranked 8th globally. Notable Silicon Valley VCs, like Redpoint Ventures and 500 Startups, also now have bases in São Paulo.
While São Paulo is by far Brazil’s hottest city, it is by no means the only favorable ecosystem to startups. Other centers are blossoming across the country, such as Uberlândia (Minas Gerais), Florianópolis (Santa Catarina), and São José dos Campos (next to São Paulo).