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Startups in Brazil grow and attract investors from USA and Europe.

Posted 2018-11-15

When analyzing the market and its difficulties, an entrepreneur stops, looks carefully at the problem, finds a solution and finally an opportunity rises and, with it, the great chance to set up a Startup.

Brazil is already a hotbed of Startups and the USA and Europe already know it.

Throughout Brazil, there are an estimated 6000-plus startups. The number is almost triple the number of startups registered in 2012, when there were only 2,519 startups registered at the Associação Brasileira de Startups (Abstartups, the Brazilian Association of Startups). In 2017, this number jumped to 5,147 and in 2018 the estimative is that there are already more than 10000 startups and some researchers and investors in the area estimate more than 15000 startups. However, some are embryonic and still don’t even have a CNPJ number (Cadastro Nacional da Pessoa Jurídica, the National Register of Legal Entity, an identification number for Brazilian companies).

 

Rafael Moreira, Secretary of Innovation and New Business in the Ministry of Industry, Foreign Trade and Services, believes the numbers “will grow more and more. The startups sector has matured in the last 6 years and with the formal entry of incubators, accelerators and investors, the market is heated and new ideas have fueled the startups sector.”

Many of the Brazilian startups have already passed the 10 million mark in terms of revenue and in 2018, Brazil gained its first “unicorns”, a name given to startups that are worth more than US$ 1 billion (a billion dollars). The achievement was initially reached by the transport application 99 Taxi and by Nubank, a startup that manages financial services, is already publicly traded and is valued at more than US$ 2 billion. The Startup already has over 750 employees and has already issued more than 3 million credit cards and has a gigantic queue, having given birth to several initiatives in the latest months, such as Nuaccount and Rewards Program.

In general, the startup ecosystem has been undergoing a ripening and the numbers are proving it. With a growing increase of almost 20% per year, the number of startups is going in the opposite direction of the crisis that the country has been facing.

This scenario is favorable for the Startups that aim Brazil as a promising market to deploy Startups with services that Brazil still does not know, be it a startup that offers health services for patients or doctors, be it a startup for laboratories or hospitals, for retail, for a housewife in her home, for a condominium or a startup for special transports.

In Brazil, 72% of the startups registered at the database of Abstartups are led by young people between 25 and 40 years old, 87.13% are owned by men and 12.3% by women.

“The entrepreneur of a startup that is now being a little successful is between 35 and 40 years old, is more mature and frequently has already tried to launch new business in other times and had the spirit and the willingness to continue. Precisely because the first business is not always going to work, but the entrepreneur in Brazil is very different from the others, they are very resilient,” says Rafael Ribeiro.

The areas that stand out in the startups sector are education (edutechs), agribusiness (agtechs), Finance (fintechs), Internet, advertising, communication, e-commerce and health and well-being. There are also a significant number of startups in the fields of logistics and urban mobility, entertainment, events and tourism.

The largest number of Brazilian startups is concentrated in the states of São Paulo (41%), Minas Gerais (12%) and Rio de Janeiro (9.7%).

With the advancements in the sector, accounting companies specializing in Startups are already standing out in the market. Such is the case with Europartner, which is in Brazil to provide support for technology, logistics, services and retail Startups.

The advantage of having an accounting service that understands taxes in Brazil can make a difference when it comes to implementing the operation on Brazilian soil. Drafting contracts, fiscal framework and hiring employees are more bureaucratic processes than in other countries in Europe or in the USA.

 

Find out the top twenty placed on the startup ranking.

 

 

Author's post: Europartner Accounting

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