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Key business segments in Brazil for investment

- Last update 13/05/2022

In recent years, the market has seen several developing business in Brazil, including Finance, such as banks, financing institutions, and accounting firm in Brazil.

Given the current scenario, some businesses are considered more attractive. Although the pandemic has affected certain segments in the country, the business model of startups has continued to grow.

In the first half of 2021, investment aimed at startups increased by 200%, given the low cost and the scaling potential of this segment.

The segments that stood out the most include financial services, real estate, retail and e-commerce, human resources, and supply tech. See more information about each of these categories.

Financial services

The financial industry is one of the fastest-growing industries in Brazil. Since traditional banks and accounting firms in Brazil have bureaucratic processes, fintech’s have found great opportunities to invest in the segment and contribute to the evolution of the industry.

In the first four months of 2021, $731 million have been invested in fintech’s over 45 rounds. This scenario was accelerated especially because of the pandemic, as financial resources were not enough, and people chose credit as a solution.

In other words, financial services are increasingly promising for investment. In addition, the Brazilian Central Bank has encouraged the entry of new investors to increasingly digitalize the segment.

Real estate

The real estate industry is not far behind. In the last five years alone, startups in the construction industry have grown by 235%, with the largest number of companies concentrated in the states of São Paulo, Santa Catarina, and Paraná.

Experts point to strong sales in the real estate market. In addition, the demand for property has increased considerably since 2020, with Ceará being one of the most favored states to invest.

Notably, the major economic changes have been driven by the investors’ interest in the real estate market, the devaluation of the real, and the cheaper real estate options compared to the rest of the world.

Retail and E-commerce Business

In fact, the outset of the pandemic in 2020 brought about very relevant behavioral changes. This has certainly accelerated the consumption pace of Brazilians, impacting the way they work, eat, and learn.

In Brazil alone, the retail market consists of 772+ companies. In 2020, more than $540 million were invested in startups.

Compared to 2019, the growth was 50%, and, in the first quarter of 2021 alone, the amount contributed increased threefold, totaling 26% in investments in 2020.

Importantly, this market evidence is also related to e-commerce startups, which, in early January alone, posted a turnover of approximately $190 million.

Human Resources Business

The Human Resources area is one of areas most impacted by innovation. Today, there are 373+ startups in this segment, and 82% were started less than 10 years ago, with solutions to transform the relationship between employers and employees.

The HR segment impacts even the work of accounting firms and registered accountants in Brazil.

To invest in this segment, Brazil has been injected with $473 million since 2014. However, this amount accounts for only 2% of the global investments in HR companies.

Nevertheless, experts believe that achieving more is possible, since there are 25+ million HR companies in the country, all capable of supporting activities in this area with a focus on innovation and technology.

Supply Techs

Certain areas, although less conspicuous, have a direct impact on consumers. This is the case of supply techs – companies that use technology to maintain a production chain, such as energy, industries, etc.

In 2021, these startups contributed approximately $223.7 million over 12 investment rounds. This figure could be even higher, as other segments that also rely on supply techs to offer their products and services are under development.

Other segments that also drew attention for their results include healthcare – which received 337% more investments in 2021 –, and education, which, in the first half of 2020 alone, received a contribution for $29 million.

You can count on Europartner, one of the top accounting firms in Brazil

With these business segments in evidence, you should consider relying on the assistance of experienced accountants in Brazil, who will help your company to invest. Europartner, an accounting firm, ensures all support required to build businesses in the country.

Although Brazilian regulatory framework is quite complex to start a business, relying on the support of a team specialized in business development is essential to guide you throughout the process.

Contact our professionals via email, we will get back to you.