The Next Brazilian Unicorns

Introduction

Before Didi Chuxing, China’s answer to Uber, injected nearly $600 million into Brazilian urban transport application 99 Taxis on January 2nd 2018, unicorns – the term for startups valued at over $1 billion – were nowhere to be seen in Brazil. In the space of three months, however, both payment platform application PagSeguro and credit card application NuBank reached and even exceeded the same symbolic mark being valued at $2.3 billion and $1 billion respectively. In less than 90 days, the Brazilian market incredibly became home to three startups valued at over one billion dollars. As the year unfolds, the two questions on everyone’s minds are “will this current wave last?” and “who will the next Brazilian unicorns be?”

Tech roots

Brazil is, according to TechCrunch, home to the subcontinent’s largest start-up ecosystem. The local technology scene began in 1983 with the founding of TOTVS – currently the largest software company in Latin America – which gave Brazil a head start in comparison to most of its regional neighbours. Today, TOTVS stands as the major business software provider for around 60% of small and medium-sized Brazilian businesses, boasts 10,000 employees and it is safe to say its foundation heralded the beginning of Brazil’s start-up sector. Business-stimulating government initiatives such as the Brazilian Association of Private Equity & Venture Capital (ABVCAP), launched in the same year, were equally important in paving the way for the sector’s growth.

Since its embryonic stages in the 1980s, both national and international investment into the Brazilian start-up scene has boomed. In 2002, Google chose São Paulo as the site for its very first Latin American office which marked the beginning of high-brow foreign interest in Brazil’s technology scene. Uber, AirBnB, Instagram and others would soon follow.

National initiatives have also matured. Today angel investment networks (Anjos do Brasil), accelerators (Startup Farm), incubators (Instituto Genesis, Supera), investment  firms (Monashees, DGF, 500 Startups) and government-funded initiatives (Innovatech) form part of a thriving ecosystem with the potential to contribute to the growth of the Brazilian economy – recent developments speak for themselves.

Hot topic

The success stories of 99 Taxis, PagSeguro and Nubank have ensured startups are now the hottest topic in both the Brazilian legal and financial industries. In light of Brazil’s flourishing network of creative hubs – São Paulo, Florianópolis, Rio de Janeiro, Recife and Belo Horizonte stand out – its abundance of promising startups and the ongoing competition between states to attract the best entrepreneurial talent, everything suggests we can expect more fabled beasts from Brazil. As for who those might be, below are four of our best bets:

Movile: São Paulo-based startup with operations in six countries and over 150 million active users. Already numbering 1,600 employees, Movile is known for its highly successful mobile content, food ordering, ticket and logistics apps. Its self-proclaimed goal is “making life better for one billion people.” PlayKids and iFood stand out as its major brands.

 
Ebanx: With headquarters in Curitiba, this payment platform start-up allows its Latin American users to quickly and easily purchase services and merchandise on foreign websites – previously this used to be a major regional headache. Up-andrunning in Argentina, Chile, Colombia, Ecuador, Mexico and Peru, Ebanx is today listed as a payment option on over 100 websites including Spotify, AirBnB and Facebook.

PSafe: The first Brazilian startup ever to reach a R$1 billion valuation, PSafe describes itself as “a global company with strong Latin American roots.” Based in San Francisco but with offices in Brazil, the company specialises in mobile privacy, security and performance applications. Its impressive portfolio of apps has been installed over 130 million times and investors include heavyweights such as Redpoint Ventures, e.ventures and Pinnacle Ventures.

Truckpad: With Shell and Mercedes-Benz as investors, TruckPad labels itself as the complete solution to “find, hire and manage independent [truck] drivers.” The application offers logistics companies remote hiring, optimised performances and real-time driver tracking whilst independent drivers are promised “the best deals” and a dedicated support team to assist them on and off the road.

By: François Le Grand